SACRAMENTO, Calif. - TelAve -- Lawrence Thompson has spent 48 years inside the machinery of American healthcare financing. He has founded and sold insurance companies and TPAs, built a company to 120,000 members, served as president of one of the largest independent TPAs in the country before selling it to UnitedHealth, and chaired the Self Insurance Institute of America.

He knows where the money goes. On the June 2 episode, he told host Vincent Catalano exactly where it should go instead.

The Fastest Path to a 30 Percent Discount

Thompson's argument is not theoretical. He tested it across 14 physician practices in five states and six hospital systems, asking each the same question: if we pay you within 24 to 48 hours, how much would you discount your fees?

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"They basically all told me 30 to 35 percent. Hospitals get paid on average in 93 days. I spoke to one hospital that has 101 people doing nothing but fighting appeals and trying to collect money. It's insane."

His proposal: fix the payment mechanism first. Pay providers faster by building a national PPO on the Medicare framework, eliminate pre-authorization, and pass the savings to members. Once fees come down, then cap them. Capping inflated rates without fixing the payment system first locks in the wrong baseline.

This episode covered: why faster payment could produce 30 to 35 percent discounts; a national PPO built on Medicare pricing; banning carrier ownership of providers; equal-nation drug pricing and ending direct-to-consumer pharmaceutical advertising; flat-fee broker compensation; and plan sponsor accountability under the Consolidated Appropriations Act.

38 Years Later, the Same Paper Still Stands Up

Thirty-eight years ago, Thompson wrote a paper arguing brokers should be paid a flat fee for a defined scope of work, not a percentage of what the client spends.

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"Your CPA does not get paid as a percentage of how much tax you paid. Your attorney gets paid a flat fee. If we really consider ourselves to be brilliant advisors, why aren't we being paid like that?"

Catalano was equally direct: "I am so fed up with the brokerage community. The smart brokers should be going after that client paying the incumbent half a million in commissions and come in with a flat fee."

Thompson noted it is also a math problem. Commissions are built into stop-loss calculations and premium structures, adding meaningful dollars to what employers and employees pay every year.

Listen to the Podcast!
Substack: https://clearlybeneficialpodcast.substack.com/p/s2e19-healthcare-big-ideas
YouTube: https://youtu.be/YvWeZWQWV7c