The Final Two Steps That Make It Work
How Aligning Incentives and Navigation Turn Your Health Plan into a Competitive Advantage
What’s missing from most health plans isn’t effort; it’s alignment and direction.
In this episode of The Healthcare Heist Podcast, Lou Bernardi completes the P.L.A.N. System by breaking down the final two steps that turn strategy into real, measurable results: Aligning Incentives and Navigation.
After learning how to prioritize employee health and leverage transparency, the next step is ensuring that every partner in your plan is working toward the same goal, and that your employees are equipped to make smarter decisions inside a complex system. Lou exposes one of the biggest hidden flaws in traditional healthcare: most vendors are financially rewarded when your costs go up. From insurers to pharmacy benefit managers and even advisors, misaligned incentives quietly drive higher claims, higher premiums, and poorer outcomes.
This episode shows you how to flip that model. You’ll learn how to structure your plan so partners are paid for performance, not volume, and how a simple question like “How do you get paid?” can completely change the dynamic in your next renewal conversation.
But alignment alone isn’t enough. Even the best-designed plan fails if employees are left to navigate the system on their own. That’s where navigation comes in. Lou explains how embedding guidance, advocacy, and AI-powered tools into your plan transforms confusion into confidence, helping employees choose higher-quality, lower-cost care before waste ever occurs. When employees are supported to make better decisions, the entire system starts working differently.
Because this is where everything comes together. When incentives are aligned and navigation is built in, healthcare stops being a reactive expense and becomes a proactive, controllable part of your business strategy.
What You’ll Take Away:
- Why misaligned incentives are the root cause of rising healthcare costs.
- How to identify and eliminate conflicts of interest in your health plan.
- The one question every CEO should ask their vendors.
- How performance-based partnerships drive better outcomes and lower costs.
- Why navigation is critical to reducing waste and improving employee experience.
- How aligning incentives and guiding decisions transforms healthcare into a strategic advantage.
Perfect For CEOs, CFOs, HR leaders, and advisors who:
- Want to move from strategy to real execution
- Are ready to hold their healthcare partners accountable
- Want their employees to make smarter, more cost-effective care decisions
- Are looking to turn healthcare from a cost center into a competitive advantage
This is where the system comes together. Because when incentives align and decisions improve, everything changes.
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Listen to the podcast here
The Last Two Steps Of The P.L.A.N. System: Aligning Incentives And Navigating To Win
How Smart Leaders Align Their Health Plan And Eliminate Waste For Good
In the last episode, we covered the first two steps of the plan system. Prioritizing employee health and leveraging transparency to take back control. We are going to complete the system. Having visibility and control is powerful, but if your incentives are still misaligned and your people are still navigating the system blindly, you are not going to get the results you deserve.
Stop Spinning Your Wheels: Why Alignment Is Key To Healthcare Cost Control
Let us start with alignment, because leverage without alignment is like horsepower without traction. You can have all the power in the world and still go nowhere. You are just spinning your wheels. That is really what the American health care consumer plan sponsors have been doing for the last 20 to 30 years. Passing more costs on to employees, giving your employees more skin in the game, and waiting for your health plan costs and claims to get under control. It is not going to get under control because you do not fully understand how the machine works.
Leverage without alignment is like horsepower without traction. Share on XThe many different ways the health systems and the health insurance companies manipulate prices, keep profits hidden from plan sponsors, and upcharge for services. There are no discounts, ladies and gentlemen. All there are markups. Markups that ultimately end up in the pockets of Wall Street executives and shareholders at your expense because they pulled the wool over your eyes, and this heist has been really consuming every aspect of your plan, except for you and your employees. Everyone else, for the most part, has a financial incentive to allow your costs to grow, to increase every year.
Breaking The Machine: Exposing Hidden Healthcare Costs And Financial Incentives
The machine was built on one core principle. Everyone in the system gets paid more when your costs go up. Insurers earn a percentage of premiums, PBMs profit from spreads and rebates, and brokers may receive bonuses tied to carriers and have hidden compensation, direct or indirect. The larger they are, the more leverage they have to generate huge profits that are not reportable even on your 5,500s. Health systems profit from volume. Doctors profit from doing procedures even when they are not necessary, even when they are not in the best interest of the patients. You?
You pay for all of it, you and your employees, through premiums. Premiums, for me, are like a gift. They are wrapped nicely in a box. You can understand your premium. You understand the single rate, the couple rate, the family rate, and the parent-child rate. You, by now, understand copays. You understand what in-network and out-of-network mean. What you are not seeing is under the hood, behind the curtain. You are not seeing that your insurance carrier is the doctors, the doctors that they are paying with your claims dollars, overpaying with your claims dollars, negotiating with themselves, their sister companies.
You are not understanding fully that the pharmacy benefit manager that is tied to your account may own your insurance company, or be owned by your insurance company, or be a sister company to your insurance company. They are creating the prescription drug formulary. They are placing medications on that formulary in favorable places for them, not where they belong. Many times, there are medications that are on these formularies that should not be covered because there are generic medications made with the same ingredients that are a fraction of the cost.
Alignment is the turning point. It is where chaos becomes control. Share on XThe more expensive medications placed favorably on the drug formulary generate huge profits behind the scenes for them. Let me ask you something. Would you ever hire a CFO whose bonus increased when expenses went up? Of course, you would not. That is exactly how your health plan is structured. Alignment is the turning point. It is where chaos becomes control. The truth is, you will probably never know enough about health care and health insurance to make an impact on your own. You would have to invest a ridiculous number of hours to do that.
If you find partners who are aligned and understand that those partners do exist, when your partners are paid for performance instead of volume, everything changes. Now they win when you win. They focus on outcomes. They help reduce cost, not drive it up. Alignment turns cost containment into capital creation. Remember, we are talking about how your company benefits financially in many different ways. By focusing on the cost and the quality of healthcare, you are taking better care of your employees. You are providing them with resources they are starving for.
Healthcare cannot be returned. This is not Amazon. Share on XThey are being steered like cattle towards the worst doctors, towards claims and services that are overly expensive, unnecessarily expensive. They benefit from resources that can be incorporated directly or indirectly into your plan that help them find the best doctors and understand what the cost is going to be prior to the service. Remember one thing. Healthcare cannot be returned. This is not Amazon.
If it were Amazon, you would see the prices up front. You would be able to see the reviews. You would be able to see images. You would be able to see ratings from other people. You would see the prices. You would know when it was getting delivered. If you did not like it, you could push a button and return it for a full refund, even after using it. Healthcare does not work that way. It should, but it does not, and it never will.
Transparency And Trust: How To Ask The Right Questions To Your Healthcare Partners
Let us make this practical. Let us start with transparency. Ask one simple question. How do you get paid? Ask your partners that. Are you self-insured today? Who are your partners? Being self-insured is not the solution. If you are still working with the same old vendors, the same old formulary, the same plan document, the same hidden costs and rebates, you have not solved anything.
You are just funding it differently. You are financing your healthcare risk. You are paying for it differently, but you are probably overpaying. Ask your partners, how do they get paid? See how uncomfortable they get with that question. Are they providing you? Are they giving you compensation disclosures? They should. It is your responsibility to collect that.
When incentives are hidden, you have a problem. When they are clear, you have control. Share on XI suppose from a fiduciary standpoint, they do not have any obligation to give it to you, but you, as a fiduciary of your health insurance plan, should be collecting compensation from all of your benefit partners as long as they are earning $1,000 or more a year in direct or indirect compensation in full amongst all of your plans. That could apply to companies as few as two people. That question alone, how do you get paid, can change the entire conversation. Walk into a renewal meeting and ask that question, and see how uncomfortable your brokers become.
They will only become uncomfortable if they have not been fully upfront and honest with you. If they have not already given you the compensation disclosure, if they think you are going to be hearing this for the first time, they are going to get very uncomfortable, especially if there is a significant amount of indirect compensation. When incentives are hidden, you have a problem. When they are clear, you have control. Are you getting back from your partners what you are paying them for?
Pay For Performance: Shift Your Vendor Strategy From Existence To Results
Most vendors are paid just to exist, not to perform. Let us shift that. Tie compensation to results. Lower claims, better outcomes, higher engagement. Things that you should expect from your benefit partners. Are they just renewing your plan year after year after year? They may be fully capable of doing much more, but they do not think that you are interested in it.
Maybe they have asked you to sit down and have a conversation about transparency, about all of these different types of plans that can be built. Maybe it is you who is standing in your own way. That is fine. Maybe they would relish the opportunity to work with you on a deeper level, to provide you with more outstanding solutions. When performance drives pay, results follow. They always will.
You do not break free from the machine if your vendors are part of it. Everyone can be part of the machine, willingly or unwillingly. It is time to work with partners who have stepped up, who are capable of more. Independent partners that share your data, align with your goals, and answer to you, not an insurance company.
The Audit Habit: Why Healthcare Plans Need Relentless Discipline
Even the best plans drift. You have to audit relentlessly. Alignment is not a one-time decision. It is a discipline. When you have a properly performing plan with full transparency of data, you can test that data. You can determine whether your pharmacy benefit manager is living up to the discounts and rebates and the prices that they have agreed to. You can tell if your TPA is paying claims properly, if your case management company is engaging with your most vulnerable employees.
Even the best plans drift. You have to audit relentlessly. Alignment is not a one-time decision. It is a discipline. Share on XYou can see if different diagnoses or conditions are being unmanaged, employees who are going without care, avoiding medications, avoiding annual physicals, all things that come back to you, information that can be shared with you, things that you do not have to read and decipher, but are interested enough in so that once a year at least, if not quarterly, you get a report with some recommendations.
Here is what is happening with your plan. We are keeping an eye on this. Here are some things that we may want to take a look at for renewal. Here are some partners that are not performing. We have put them on notice. We may be looking for a new TPA next year. Maybe we can do better with our stop loss, maybe a pharmacy benefit manager, maybe a dialysis-focused vendor, maybe a musculoskeletal-focused vendor, maybe a company that is managing your GLP-1 for both weight loss and diabetes type 2 medications. Things that your plan and the data can help you with.
You audit these and always come back to the same question. How do you get paid? These vendors. When alignment is real, everything changes. Costs stabilize, trust improves, performance increases. Here is the part CFOs love. Every dollar of waste you eliminate drops straight to the bottom line. This is money that is currently being sent out the door, basically directly towards shareholders on Wall Street. Let us take that back.
AI-Powered Navigation: Using Data To Guide Employees To Better Care
Transition to navigation. Let us move on to the fourth step, the N in navigation, the N in plan. Even with the right plan and the right partners, there is still one major problem. Your employees are still navigating the system on their own. In business, you would never ask someone to make a major decision without data, guidance, or support. You would not tell your employees they could have a company car and allow them to walk into a dealership and just lease or buy anything with your money. You just would not.
Navigation flips the script. It turns confusion into clarity. Share on XIs that dealership going to guarantee them the best price? Of course not. It will charge $1,000 for a 500 dollar car every day if it could get away with it. That is exactly what is happening in healthcare every day. Employees enter a system filled with confusion, hidden costs, and conflicting information. Sounds like buying a car to me. The machine profits from that confusion. Navigation flips the script. It turns confusion into clarity. When we are talking about navigation, we are talking about helping your members find the highest-performing providers.
You are helping your employees understand the cost of their care, their out-of-pocket cost, and the total cost of that care before they go, something that has eluded people for many years. Remember, behind the scenes, and even if you are not aware of it, all claims data has been released from insurance companies, from health systems. Just about every claim in the country is available for companies that know what to do with it.
They can use that data to help better underwrite health care plans, identify groups that perhaps underwriters would walk away from before. For your employees and for you, what this means is help finding the best doctors, help with transparency, and prices. Knowing beforehand that if you walk into that MRI center, the doctor previously would have just taken out a piece of paper and said, “Here, you can go right down the hall to our health care system, our health hospital system-owned MRI radiology center,” that ultimately might be a $3,000 MRI.
You want your employees to go for the same high-quality MRI at an independent facility that is willing to accept $1,000 for that same test. Understanding their options, comparing cost and quality, making better decisions before the claims happen, not finding the cheapest care, finding the highest value care. That is how you stop waste before it starts.
You have alignment, you have clarity, and you have control. The question is no longer whether you can fix your health plan. It is whether you are ready to lead that change. Share on XHow does AI play into this? Today, we have everything we have never had before. We have the ability to turn massive amounts of data into simple decisions. With AI-powered navigation, employees can ask simple questions and get real answers in real time, and choose better care. They can use AI in an app that knows everything about their health plan, the drug formulary, the copays, the out-of-pocket costs, and the network, and can answer employees in a matter of seconds, where they can seek the care and what the out-of-pocket cost to them will likely be. It will explain the plan.
It is not about replacing people. It is about empowering your people and what this means for everyone. When navigation is done right, for employees, healthcare becomes simpler, less stressful, more accessible, and more like other things they purchase daily. For HR, you gain visibility without more work. Fewer problems throughout the year have to come to you. You have resources that answer your employees’ questions better than you ever could. Less traffic in your offices.
For CFOs, you get predictability, you get control, you get to understand where the trajectory of your health plan is going, and you make better estimates on what next year’s premiums might look like. For CEOs, you build trust, you build culture, you work on your legacy, and you gain a competitive advantage that helps everybody I just mentioned.
A competitive advantage in the war for talent. If you can save money on your health insurance plan, offer a richer plan with lower out-of-pocket costs, lower payroll contributions so that more money can stay in wages, that makes a big difference when you are sitting down across the desk from a candidate that you really would like to work for your company, as long as everything else within your company, the pay, the culture is suitable, then what you need to seal the deal is a benefit plan that stands out to them.
Are You Ready To Lead? Taking Control Of Your Healthcare Plan Strategy
That is what leadership looks like in healthcare. At this point, you have built the full plan system. Let us imagine that. The full system comes together. You put the plan into action. You have prioritized health. You have leveraged transparency. You have aligned the incentives and embedded navigation, maybe not all at once, but over a 2, 3, or 5-year period. That is how you beat the machine. For years, the machine, the system, relied on misalignment, confusion, and inaction.
Now we have the opposite. You have alignment, you have clarity, and you have control. The question is no longer whether you can fix your health plan. It is whether you are ready to lead that change. That is all for this episode. Thanks for tuning in. I hope you have learned a thing or two. More importantly, I hope it helps you get the results you and your people deserve. If this resonated with you, I would love to connect to further the conversation. Until next time, do not settle for a health plan that is not working as hard as it should for you and your team. Have a great day.
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