Giving Patients the Money Won’t Fix Healthcare. But I Understand Why We’re Trying.

I’ve spent my career inside the healthcare system, negotiating with PBMs and insurers, collaborating with providers and working with so many people who genuinely want to improve patient outcomes. However, I also have seen firsthand how even well-intentioned policies can produce results with unintended consequences.

That’s why I read the administration’s Great Healthcare Plan with both interest and a healthy dose of realism. Trying to find a way to fix our system is one of the top priorities our legislators should be focused on right now. Healthcare costs too much, insurance feels opaque, and patients are often the last to understand what something will actually cost until the bill shows up.

One of the plan’s most prominent ideas is to send healthcare dollars directly to patients rather than routing them through insurance companies. As someone who has watched subsidies and rebate payments to middlemen pile up over the years, I understand the instinct to stop the ACA, and the plans that run it, from absorbing more money without delivering relief. Why not instead pay patients and put them back in charge?

It’s a reasonable question. It’s also where theory and reality start to diverge.

In principle, consumer control should drive competition. That logic works in many industries. Healthcare has spent decades proving it is NOT most industries. Why?

Insurance is not something people shop for often or easily. Plans are hard to compare, networks matter more than price, and switching can mean losing trusted doctors. In many markets, competition is thin to nonexistent. When there are only one or two insurers, the idea that consumer choice alone will force prices down starts to look optimistic at best.

There’s also a basic economic truth that anyone who has worked in drug pricing or reimbursement recognizes. If you increase purchasing power without changing how prices are set, costs will rise to offset that power. Sending cash to patients MIGHT make coverage more affordable in the short term, which would be nice, but without some type of price regulation, the underlying price of care will not come down. Premiums WON’T magically shrink. Insurers will just shift and find a revenue stream somewhere else to make up for this headwind.

So, throwing money at patients rather than giving it to insurers just feels like a shell game. The money ends up with insurers, but is just basically being laundered through patients. And it won't automatically make care more affordable for patients. $1000 sounds good, but if the total bill is $5000 and you can't afford to pay the $4000, once you use the government stipend, does it really help?

Patients experience healthcare costs through monthly premiums, at the pharmacy counter, in the exam room, and weeks later when the explanation of benefits arrives. I’ve worked in an industry where list prices, rebates, and negotiated discounts for drugs don’t often correlate with what patients end up paying. Changing how subsidies flow to insurance companies, whether directly or through patients, does not, by itself, change hospital pricing, specialty drug costs, or benefit designs that push more expenses onto patients at the point of care.

That doesn’t mean the Great Healthcare Plan is not well-intentioned. In fact, some of its strongest proposals are directed at the right problems. Lowering drug prices, reforming pharmacy benefit manager incentives, and enforcing price transparency are steps long overdue. These White House efforts are important – they demonstrate recognition of a major problem for all Americans. Healthcare costs are not high because patients are careless. They are high because pricing power is concentrated, incentives are misaligned, and complexity protects the status quo.

Giving patients more control is a meaningful start. It can expose tradeoffs that are currently hidden. It may force insurers and manufacturers to justify prices that have long gone unquestioned.

But I’m convinced that real cost relief will only come from deeper structural change. We have to address and be transparent as to how prices are what they are, how we increase fair competition in the healthcare marketplace, and how to incentivize value over volume.

Empowering patients matters. Fixing the machinery behind the scenes matters more.

Putting patients in control is a worthy goal, but throwing them $1000 will not make even a short-term dent. Making healthcare truly affordable will require fixing the pricing and competition failures that cash alone can’t solve.