I built these healthcare systems. Now I know why they're not working

Most employers are solving the wrong problem when it comes to healthcare benefits. Instead of solving the affordability and access issue, they're locked into a cycle of minimizing next year's cost increase — and it's producing a benefits experience that underdelivers for both the business and its people.

During every renewal cycle, HR and benefits leaders face the same dilemma: how to offer competitive benefits that attract talent without letting premiums spiral. Too often, the result is a compromise that hurts everyone — higher employee cost-share (deductibles/co-pays), narrower networks, and tighter utilization controls. These measures may keep line items in check, but they degrade the member experience and drive hidden costs that are harder to track — and even harder to undo.

I've spent my career leading network strategy and operations for large national insurers. And I've seen how well-intentioned benefit designs can unintentionally create barriers that frustrate members and inflate long-term costs. The pressure to "win" this year's renewal often leads to short-term decisions that delay — rather than solve — structural inefficiencies. Over time, those decisions compound and make the system harder to fix.

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The standard cost-containment playbook — complicated cost-sharing, narrow networks, step therapy, prior authorization — may reduce upfront spend, but it does so by adding friction at nearly every step of the care journey. And that friction has real consequences: delayed care, broken trust, and ultimately, higher downstream costs.

Significant cost-sharing like high deductibles, copays, and coinsurance discourages people from seeking care, leading to delayed diagnoses, worse outcomes, and more expensive complications. Nearly 40% of insured adults report delaying care due to cost.

While narrow networks can sometimes reduce unit costs, they do so by limiting access to care. Legacy carriers treat networks like prix fixe menus — you're locked into a bundled offering, whether or not each provider is the best fit. That means members may lose access to trusted doctors or be forced to navigate around exclusions for routine services. In contrast, more flexible, a la carte approaches allow members to receive cancer treatment at a leading academic center while getting an X-ray at a low-cost urgent care down the street.

Narrow networks make that kind of tailored, cost-effective care nearly impossible — and the result is often higher total cost and lower satisfaction. Mental healthcare is a clear example: Many therapists no longer accept insurance because the reimbursement model is so rigid it prevents them from delivering appropriate care. When providers opt-out and patients are left paying out of pocket, the system isn't working — for anyone. 

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Step therapy is a clear example of how optimizing pharmacy benefits through middlemen misses the mark. Instead of empowering consumers, it creates needless complexity — requiring patients to fail on insurer-preferred drugs before accessing the treatments their doctors originally recommended. 

A better approach? For high-cost medications, offer price transparency and financial incentives to provide members, and their doctors choice. For generics, show consumers where they can get the best value and share the savings with them. Educate consumers on the benefits of mail order (cost/convenience) but don't require it. When members have visibility and agency, they make smarter choices — and the system stops paying for inefficiency.

In trying to control costs, many plans build in the very inefficiencies they aim to eliminate.

If HR leaders want a more stable, sustainable path forward, they need to redefine what success looks like — not just a lower premium next year, but a plan that empowers better care decisions and controls cost growth over the next five.

That shift requires a new approach to plan design. Instead of focusing solely on rate negotiations, employers should ask: How do we create benefits that reward informed choices, reduce friction and give members the tools to navigate their options with confidence?

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The good news? We know what works.

Forward-thinking employers are already moving in this direction. They're investing in solutions that remove barriers, align incentives, and prioritize transparency — not just of prices, but of how the benefits themselves work. They're treating members as participants in the system, not passengers swept along by it. They're making deliberate choices to:

• Eliminate unnecessary barriers to care
• Design plans that reward cost-effective decision-making
• Equip members with tools to compare costs and quality — and act on them
• Reinforce engagement with primary care and preventive services
  

These aren't just operational tweaks. They're strategic decisions — rooted in the understanding that member experience and long-term cost control are inextricably linked.
And when you optimize for value, the outcomes follow: lower long-term cost, healthier employees, more predictable claims, and higher satisfaction. While national averages show employer health plan costs rising by approximately 6% annually in recent years, employers that have adopted more transparent, value-based designs are seeing early signs of cost stabilization — particularly where benefit structures actively support informed care decisions.

It's time to stop cost-shifting and start value-building. Because if you're still optimizing for premiums alone, you're solving the wrong problem.