Relentless Health Value EP483 (Part 1): To Contain Skyrocketing Healthcare Costs or Renewals, You Gotta Understand How the Flywheel Works, With Jonathan Baran
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Aug 7, 2025 Jonathan Baran, Co-founder and CEO of Self Fund Health, tackles the intricacies of the U.S. healthcare system. He delves into how insurance carriers profit from rising premiums and the misleading marketing tactics that create a false sense of discounts. The conversation highlights the 'flywheel' concept, illustrating its role in escalating costs. Baran emphasizes the need for employers to prioritize value over price in their healthcare purchasing strategies, and critiques how electronic health records prioritize profits at the expense of patient care.
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Carriers Profit From Rising Premiums
- Carriers and brokers profit more when premiums rise, benefiting from higher percentages.
- They focus marketing on discounts rather than controlling actual healthcare costs, spinning a profit flywheel.
Healthcare Costs Spin Like Flywheel
- The healthcare cost increase resembles a flywheel where repeated actions build momentum.
- This explains why renewal increases far exceed general inflation, perpetuating a costly cycle.
Buy Healthcare, Not Insurance
- Employers must stop buying insurance framed by discounts and start purchasing healthcare directly.
- Changing payment methods alone won't reduce costs; buying value-based, cost-effective care is essential.
