Why Employers Pay More Because of Vertically Integrated Medicare Advantage Carriers with Betsy Seals. EP510

The Line Between Fair Profit and Profiteering in Medicare Advantage. Episode 510

There's a simple test for telling a fair profit from profiteering in Medicare Advantage: does the carrier make more money when the patients it serves are worse off? In this episode, Stacey Richter talks with Betsy Seals, co-founder of Rebellis Group and a Medicare Advantage consultant making her third appearance on the show, about how vertically integrated carriers shift costs onto self-insured employers' commercial rates, why MA plans can end up paying providers they own more than independent practices, and the back-to-basics strategy Seals recommends for any MA plan that wants to make money the right way.

WHAT YOU'LL LEARN

✅ How vertically integrated carriers negotiate the lowest possible Medicare Advantage rates with consolidated health systems, then let those systems make up the difference by raising commercial ASO rates — a cost-shifting pattern research puts at 4.7% above what employers would otherwise pay

✅ Why Medicare Advantage carriers that own provider organizations have a financial incentive to pay those owned providers more than independent practices, since MA rate increases are pegged to fee-for-service benchmarks

✅ How Goodhart's Law shows up in STARS and other quality measures — once a measure becomes the target, it stops reliably reflecting genuine member health improvement

✅ The back-to-basics strategy Betsy Seals recommends for Medicare Advantage plans: don't get caught with your hand in the cookie jar, focus on the beneficiaries you actually serve well, and use STARS and clinical programs to genuinely improve health rather than to check boxes

✅ Why squeezing independent primary care practices on reimbursement can ultimately raise the total cost of care for everyone, even though it looks like savings in the short term

WHY THIS MATTERS

Medicare Advantage runs on taxpayer dollars, and it's the care seniors, family members, and friends depend on. When the financial incentive flips — when a plan makes more money the worse its members do — that's profiteering, not business. Seals's back-to-basics framework offers a way to tell the difference, and a roadmap for plans willing to make a fair profit instead.

MENTIONED IN THIS EPISODE

EP481 with Benjamin Schwartz, MD, MBA: Apple Podcasts | Spotify | Other Apps

EP495 with Mick Connors, MD: Apple Podcasts | Spotify | Other Apps

YouTube Video: Eric Bricker, MD, on the financial performance of the U.S. healthcare system

EP463 with Betsy Seals: Apple Podcasts | Spotify | Other Apps

EP482 with Preston Alexander: Apple Podcasts | Spotify | Other Apps

EP462 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps

Article: STAT, "Trump Goes Soft on Medicare Advantage Medical Underwriting," by Bob Herman

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar

🎤 Follow us on Apple Podcasts

🎤 Follow us on Spotify

📺 Subscribe to our YouTube channel

=== CONNECT WITH THE RHV TEAM ===

✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X

TIMESTAMPS

00:00 Introduction to this episode.

01:25 How Medicare Advantage is relevant to everyone.

06:15 A preview of today's conversation.

07:49 The "state of the state" of Medicare Advantage plans.

09:32 Does Medicare Advantage's losses matter to the patients?

10:29 A recap of Betsy's insights so far.

11:19 The underlying strategic through line that needs to be considered.

13:04 The impact of Goodhart's Law.

14:12 What the players that are succeeding right now are doing.

14:22 The first pillar of a back-to-basics strategy: Don't get caught with your hand in the cookie jar.

16:50 Why short-term strategies don't work.

18:26 Stats report on prior authorizations serving the beneficiary.

19:38 Why prior authorization needs change.

21:28 The better strategy to use.

23:17 The second pillar of a back-to-basics strategy: Focus on the beneficiaries you actually serve well.

24:37 What it looks like to implement this focus on the beneficiaries you serve well.

25:29 How special needs plans play into this.

27:43 The third pillar of a back-to-basics strategy: Think about how STARS in clinical programs improve health.

30:04 The ethical component to implementing a Medicare Advantage program.

31:04 Betsy's advice for independent practices dealing with prior authorizations.

34:08 Betsy's final notes for all players impacted by what's currently happening.