Matt dives into a specific healthcare topic to help those in the industry, and those outside of it, better understand the market drivers causing today’s healthcare challenges.

Objective imaging. Documented loss of function. A physician who believed in the treatment plan.

And I still had to fail cheaper therapies first because the insurer required it.

The denial came back from an algorithm. The same parent company owned the insurer, the PBM, and the specialty pharmacy. They controlled the prior authorization criteria, the formulary, and the distribution channel. Every decision point lived inside one vertically integrated entity whose fiduciary duty ran to shareholders.

Not to my spine.

I appealed. I spoke to someone reading a script. They cited policy. They never referenced me.

That was the moment I understood the architecture. I had entered a closed loop. The plan limited options. The PBM dictated economics. The specialty pharmacy controlled access. My physician became a compliance officer inside someone else’s revenue design.

When the payer owns the gate, the toll booth, and the road, the patient becomes throughput.

That experience shapes how I see the Break Up Big Medicine Act.

THE BILL GETS PART OF THE DIAGNOSIS RIGHT

Senators Hawley and Warren identified a real concentration problem.

Three PBMs manage roughly 79 percent of prescription drug claims for about 270 million Americans. CVS Caremark, Express Scripts, and OptumRx sit inside insurance giants. The entity approving your claim often owns the pharmacy filling your prescription and designs the formulary steering decisions.

The FTC confirmed that affiliated pharmacies tied to the three largest PBMs account for nearly 70 percent of specialty drug revenue. Since 2019, nearly 4,000 independent pharmacies have closed. Nearly 80 percent of physicians now work for a corporate parent.

Concentration exists. Conflicts of interest exist.

Breaking up vertical integration addresses scale.

It does not address the root.

THE REAL TUMOR IS POWER WITHOUT RESPONSIBILITY

Vertical integration industrializes the problem. It does not create it.

The deeper issue is that we built a system where financial entities control access to care without carrying medical liability for the consequences.

Insurers shape treatment through coverage design. Step edits. Fail first protocols. Closed formularies.

Technically they do not practice medicine.

Operationally they influence it every day.

If a delay harms a patient, the physician carries the malpractice risk. The insurer carries none.

That asymmetry drives everything.

You can reduce integration. If you do not align authority with accountability, you will reorganize power instead of reforming it.

FOLLOW THE $275 BILLION

Roughly $275 billion flows each year through 340B spreads, Medicaid supplemental payments, and nonprofit tax advantages.

The 340B program alone has grown to more than $120 billion in total value, doubling in five years. Seventy percent of purchases now occur in hospital outpatient settings. Hospitals acquire drugs at steep discounts and often receive reimbursement at higher commercial rates. The spread becomes margin.

The program does not require savings to pass directly to patients.

Research shows some 340B hospitals charge uninsured patients multiples of acquisition cost for drugs purchased at a discount.

Layer in Medicaid supplemental payments and provider taxes. Add nonprofit tax exemptions for large health systems operating like fully integrated enterprises. Capital accumulates. Acquisition accelerates. Market leverage grows.

Break up vertical integration tomorrow and that subsidy architecture still rewards price inflation and cross subsidization.

Money still follows complexity.

Complexity still protects incumbents.

STATE-LEVEL PROTECTIONISM LOCKS THE DOOR

Federal reform alone cannot fix a layered system.

Thirty five states and Washington, DC operate Certificate of Need programs. Providers must secure state approval before opening facilities or expanding services. Incumbent systems often oppose new entrants directly.

Research shows CON laws reduce hospital beds and significantly limit the number of hospitals per capita. Supply stays tight. Prices stay elevated.

Scope of practice restrictions further constrain workforce capacity. When nurse practitioners or pharmacists cannot practice to the top of their training, access shrinks and costs rise.

If federal lawmakers break up national giants but leave state barriers intact, dominant regional health systems absorb the opportunity.

And that leads to the unintended acceleration risk.

Why Incomplete Reform Could Accelerate Consolidation

Here is the mechanism.

You weaken vertically integrated payers.

You leave 340B spreads, supplemental payments, nonprofit tax advantages, CON laws, and scope restrictions untouched.

Independent practices lose negotiating leverage. Hospitals retain subsidy advantages and referral control. Acquisition deltas between hospital outpatient departments and physician offices can exceed 30 to 50 percent for certain infused drugs.

Between 2019 and 2022, hospitals acquired more than 65,000 physician practices. In concentrated markets, physician employment exceeds 70 percent.

Pressure margins and consolidation accelerates.

You trade a national conglomerate for a hyper concentrated local monopoly.

Patients see higher facility fees, longer wait times, and fewer independent options within driving distance.

The logo changes.

The friction remains.

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WHAT THIS MEANS FOR HEALTHCARE LEADERS

If you run a health system, payer strategy team, pharma access function, or advocacy department, this debate affects you directly.

If Congress breaks up vertical integration but leaves 340B, Medicaid supplemental payments, nonprofit tax structures, and CON laws intact, regional hospital leverage increases.

Independent practices sell faster.

Site of care economics tighten.

Access barriers shift from national payers to dominant local systems.

Your strategy cannot stay national if market power becomes hyper local.

If you lead access, government affairs, market development, or advocacy strategy, you need to ask:

·       Where does real leverage sit in your top markets?

·       Who controls referral pathways?

·       How exposed are you to hospital outpatient site of care differentials?

·       What happens to your model if independent practices disappear?

Most organizations still build strategy around national payer negotiations.

That may not be where the next battle gets fought.

WHY CITIZENS DO NOT MOBILIZE UNTIL IT IS TOO LATE

The system hides its structure until crisis.

Most Americans engage healthcare episodically. They assume access. They trust their employer plan. They do not study PBM rebate mechanics or site of care economics while healthy.

Then a diagnosis hits.

At that moment, they shift from consumer to captive.

Cognitive overload sets in. More than 60 percent of insured adults do not fully understand key elements of their plan design. Add fear, financial exposure, and administrative complexity.

Medical debt affects roughly 100 million Americans. Families focus on survival, not structural reform.

By the time patients recognize the pattern, they lack the bandwidth to fight it.

The system benefits from that cycle.

WHAT PATIENTS WILL EXPERIENCE THREE YEARS LATER

If the bill passes without structural alignment, patients will see modest administrative shifts.

Then local consolidation tightens.

Independent practices sell. Facility fees expand. Wait times hold or worsen. Referral pathways remain controlled by dominant regional systems.

Premium relief, if any, proves temporary.

Patients hear rhetoric about competition.

They still fight for care.

Hope followed by stagnation erodes trust faster than stagnation alone.

FROM EXAM ROOM TO INCENTIVE ARCHITECTURE

I fought this system for two decades as a patient.

I have also sat across from executives who could model margin to the basis point but could not describe what a denial feels like at 2 a.m.

Here is the bridge.

When authority detaches from accountability, patients absorb the cost.

That is why I built Advocacy Intelligence.

As a discipline that forces organizations to map where financial incentives override patient outcomes and where structural friction hides inside policy.

If your organization cannot identify where it benefits from complexity, you cannot lead reform credibly.

A HARD QUESTION FOR YOUR TEAM

Before you debate this bill, pressure test your own model.

Who inside your organization controls access decisions?

Who carries longitudinal outcome risk when those decisions delay care?

Where do subsidy flows or site of care economics shape clinical pathways in your markets?

If those answers create discomfort, that discomfort is insight.

That is where reform begins.

A DIRECT CHALLENGE

Every organization publicly criticizes system dysfunction.

Few examine whether their revenue model depends on it.

Does your organization profit from friction you publicly condemn?

If the answer is yes, federal reform will not fix your credibility problem.

Structural reform requires internal alignment before external advocacy.

WHAT GENUINE REFORM REQUIRES

Real reform must realign incentives, not just ownership charts.

Align financial risk with clinical authority.

Restore site of care neutrality and require transparent 340B pass through to patients.

Modernize or repeal CON laws and expand scope of practice tied to measurable access benchmarks.

Mandate enforceable real time pricing transparency.

Invest in pre crisis civic fluency so citizens understand system mechanics before diagnosis.

Control does not equal accountability.

Until revenue aligns with measurable patient outcomes across time, the system will preserve friction because friction generates margin somewhere.

You can redraw the org chart.

If a patient still has to fight for medically appropriate care while every institution involved remains financially whole, reform failed.

The exam room is where policy credibility lives or dies.

Design from that chair.

Not from the hearing room.

NEXT STEP

If you want to understand how your organization fits within this shifting architecture, email me at [email protected] with the word STRUCTURE, and I will send you a short Advocacy Intelligence diagnostic for executive teams.

Or book a strategy session and we will pressure test your exposure together.

Policy analysis earns attention.

Incentive alignment earns trust.

And trust is the scarcest asset left in American healthcare.