TPA and Health Plan Inertia: What Self-Insured Employers Need to Know, With Elizabeth Mitchell

PBGH member employers collectively spend over $350 billion a year on healthcare. And per Elizabeth Mitchell, 30% of that spend disappears in the middle — not reaching providers, not improving health — just gone into administrative spread, misaligned fee structures, and the cost of a system that was never designed to pass money through efficiently. That number is not speculation. It is what she observes across her member organizations.

In this Take Two episode, Stacey Richter revisits a conversation with Elizabeth Mitchell, President and CEO of the Purchaser Business Group on Health (PBGH), about why health plan and TPA inertia is arguably a bigger problem than employer inertia — and what employers who are done waiting are actually doing about it.

WHAT YOU'LL LEARN
✅ Why a TPA's job should be exactly three things — pay claims, provide transparent data, negotiate contracts — and how the moment health plans start layering in care management services and carve-outs, they retain more of the money and make it harder for employers to work directly with the providers they want

✅ How one employer discovered they were paying five times the hospital's published price for a service, sought a refund directly from the hospital, and had their own health plan try to block the transaction — because the health plan's network rate was higher than the direct price

✅ What happens when employers direct contract without a TPA in the middle: in every case PBGH has tracked, employers see a 10 to 30% reduction in total cost of care, better access, better patient experience, and better outcomes

✅ How the Consolidated Appropriations Act (CAA) changed employer accountability: employers can no longer say "my consultant recommended it" — they are held to an expert standard, they are entitled to their data, and the liability is personal and organizational

✅ Why a 4.7% price markup appears when hospitals are in a TPA's Medicare Advantage network — TPAs negotiate commercial clients to pay higher rates so their MA members pay lower rates, which is not in the interest of commercial plan participants

✅ What PBGH did when three jumbo employers issued a direct RFP for high-quality whole-person primary care: providers literally asked "what do you mean, there's no health plan?" — and then the RFP was wildly successful, because providers and employers want the same things

WHY THIS MATTERS
As Elizabeth Mitchell puts it, having a health plan in the middle between an employer and a provider is like being at the UN with a bad translator. The plot gets lost. The money gets lost. And for decades, employers had no way to verify what was actually happening because they couldn't get the data. That is now changing. The employers who are using it are seeing results. The question is whether enough of them move fast enough to create a market that makes inertia an unviable strategy.

=== LINKS ===
🔗  Show Notes with all mentioned links:  
https://cc-lnk.com/EP436-Take2

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