In our latest podcast episode, we sat down with Korb Matosich, co-founder of Asserta Health. Korb and his team are laser-focused on fixing a key aspect of healthcare: the payment system.
We dive into why the healthcare payment model has failed to serve patients, employers, and even providers—and how innovative solutions like cash payment models are revolutionizing the way we pay for care.
Korb breaks down the opaque nature of the traditional healthcare network. He highlights how networks, originally designed to provide access to providers at discounted rates, have evolved into systems that now drive up costs. Rather than helping consumers, these networks contribute to ever-increasing healthcare expenses, leaving patients and employers to foot the bill.
In Korb's words, “Healthcare payments—it’s a train wreck.” He explains that networks promise discounts but hide the actual price tags behind a complicated and opaque system. The result? Patients often find themselves paying inflated prices while thinking they're getting a deal.
Korb and his team believe there’s a better way—cash payments. The idea may seem old-fashioned, but it’s proving to be a potent solution in today’s health landscape. Cash payment models give patients and employers the transparency they need to understand the true costs of care and make informed decisions. As Korb shares, this model not only helps contain costs but also provides a much smoother experience when integrated with primary care partners, like BowTie.
One of the key topics covered in the episode is why more employers haven’t jumped on board with cash payment models. Korb shares that many companies are resistant to change, even when faced with unsustainable healthcare costs. Employers have grown "addicted" to the logos of traditional PPO networks, despite the growing evidence that these networks are inflating costs without providing additional value.
However, employers who embrace cash payment strategies often see dramatic cost reductions while still maintaining access to high-quality care. Korb encourages companies to consider this shift as a fiduciary responsibility, particularly in light of growing legal pressures for employers to better manage health plan spending.
Click here to listen to the full episode.
Episode Transcript:
Korb Matosich: One of the highlights of my journey as, uh, Through this whole health guardianship and building the bowtie was to [00:01:00] meet, uh, uh, Corb Matusik, I was sincerely, [00:01:30] deeply impressed with the depth of his understanding of, uh, the problems with the payment system. Corb and, uh, his partner, Lisa, Dr Bernke, really, uh, gave me the doubled up my hope, he had witnessed the, uh, really the mirror image of the waste that I had witnessed in the, [00:02:30] in the service part, in the payment side. to me really, uh, as you know, when you're building a new system, sometimes, uh, the difficulties of [00:03:15] building kind of puts doubt in your mind, am I on the right place? Should I go and choose it? But meeting Corbin again, Lisa convinced me not only we are on the right path, uh, but there are, uh, uh, soulmates in this [00:03:30] rebel camp, uh, that can help each other to move this forward.
So, uh, with that introduction has been a absolute pleasure to get to know, uh, Corbin to say, uh, learn from him, most importantly, and, uh, [00:03:45] really, uh, appreciate it. be a be a partner with him in expansion of this rebel camp.
Korb Matosich: Thank you very much, Dr Donnis. Gary, it's a real pleasure to be here and um and thank you for your kind introduction. So what? Um, what kind of led me here? I mean, if I if I If I really kind of go back to the beginning was a [00:04:15] probing question from my wife when I was in graduate school and looking for job interviews.
Um, and, and I was interviewing in various kind of new media companies and so forth. And she asked me the question, are you ever going to do anything important? [00:04:30] And, uh, uh, you know, that kind of cut to the core and I started looking for, uh, the something that was in the, in the intersection of, of technology.
Because I was passionate about working in technology and something that was [00:04:45] important. And that led me to healthcare. Um, and I actually started my healthcare career at a company that at the time was called Ingenix. It's now known as Optum, part of the United Health Group family and companies. And I got my start, um, interestingly enough, [00:05:00] working on the revenue cycle management side of things.
So working with large provider organizations and, uh, helping them accelerate their revenue cycle, helping them get paid. I didn't have a clinical background, so I was focused on the business side of things. I did that for several years. [00:05:15] And then I was asked to switch sides, so to speak, while I was still at Ingenix and take over their payment integrity operations, which is the flip side of the same coin, but then paying claims.
Through that journey, I saw healthcare payment from all [00:05:30] sides and arrived with what I believe is a very obvious conclusion. There's nothing insightful about this. Healthcare payments, it's a train wreck. It's, it's an absolute disaster. It's one of the most complicated business processes known to man. Um, and, [00:05:45] uh, what I guess the, the insight or, or the, the innovation that we brought to it is we believe that it could be better, that it could be different.
And, um, and so when I say we, I met Dr. Banky, you [00:06:00] mentioned earlier, along that journey, and we decided to create a company to deliver a better, more efficient way to pay for healthcare.
Josh Taylor: You, uh, talk about the network often and how the network really needs to die. [00:06:15] Why would you describe it in those terms?
Korb Matosich: Um, well, so, um, networks are incredibly opaque things.
Um, basically, um, the way that they function today is they're [00:06:30] very good at ensuring access to providers. Um, well, at least ensuring that your, that, that your, your insurance plan covers them, although, you know, getting in a timely manner can be amazing. Difficult, but [00:06:45] the networks are, are very opaque things that, um, have resulted in ever increasing costs.
Uh, PPO networks were introduced in the eighties. Um, I think the first year that they were introduced. Price points went down every year [00:07:00] since price points have climbed. Um, they do not, uh, the very nature of their, of the agreements between the parties that participate in them is that the business terms are hidden.
And the result [00:07:15] is, has been, uh, you know, a very opaque process where you know, price points continue to increase every single year. And why do they need to die? Because obviously anything that is facilitating increased costs and health [00:07:30] care is not good for the system, right? It's not it's not good for the folks that are ultimately paying for care, which at some level is employers, but ultimately it's It's the end consumer that's footing the bill.
Firouz D.: And Josh, if I may add to [00:07:45] that from a physician perspective is really adding absolutely no value to the, uh, to the relationship between the doctor and the patient, when you work in a marketplace, you see the doctors actually change employers and people for their solving their [00:08:45] issues, they go to doctors.
They don't go to the buildings when the doctor works in the building. A belongs to that employer to building B. The other employer has played no value.
Korb Matosich: Originally, if I might just make one more point like originally the reason why I introduced networks were introduced is because [00:09:45] If you use our network, you will get a discount, right, was the concept. And, um, I guess to some extent there are some very narrow networks where discounts are more meaningful, although they're not, that strategy is not actually [00:10:00] really in common use.
Most networks are incredibly broad, um, and the discounts are off of fictitious prices. So, you know, the way that networks are sold are, you know, sign up with me and I'll give you [00:10:15] the best discount. Um, you know, this would be equivalent to going into a car dealership and, and, and they basically say, okay, I'm going to sell you this car.
And you say, well, how much, how much is it? Well, I can't tell you that, but it's a 50 percent discount, like who in their right mind. [00:10:30] Would sign up for that, right? I mean, because we would know that the car dealer would likely mark up the car quite a bit and a 50 percent discount would be undefined. And I would probably be very unpleasantly surprised by what I have to pay, you know, when I finally get the bill.
And that's [00:10:45] exactly what's happening in healthcare.
Josh Taylor: Uh, the affordable care act is clearly a watershed moment for a lot of people inside of the healthcare space, inside of the healthcare insurance space, health benefits space. [00:11:00] What was it about? The Affordable Care Act from your perspective that started to change your mind about what the solution should be for these misalignments that you were seeing.
Korb Matosich: Yeah. So, yeah, I mean, what [00:11:15] I would say is. The Affordable Care Act was clearly a pivotal point for the industry. Um, I mean, I don't, it certainly hasn't made care more affordable. That's not to say that there are no merits to it. But, um, [00:11:30] really, the Affordable Care Act forced me to ask a question that got me thinking about paying for care differently.
And the reason why that happened was when the Affordable Care Act was first introduced, all of the subsidies that are [00:11:45] currently present and, and candidly underwriting the bulk of the cost of the people that participate in the public exchanges, those were not present. And so, um, when the Affordable Care Act first came out, I, I [00:12:00] believed that it would lead to ever increasing costs, um, which it in fact has, right?
Healthcare costs have gone up. Um, you know, very rapidly since its introduction, it didn't slow cost at all. If anything, it probably helped accelerate them. And, [00:12:15] um, but because of the insurance mandate, Um, you know, my belief was that what would happen is that healthy people are healthy people basically would elect to opt out of [00:12:30] the marketplaces because the cost would keep going up and up and there would be, you know, no economic justification for continuing to buy that product.
Even, you know, even with the mandates because the penalties that were initially prescribed were [00:12:45] not that high. And so my belief was at the time that, uh, healthy people would opt out of the product. And they would need to purchase healthcare and basically a shadow cash economy. Um, and that [00:13:00] we would see more and more cash offerings, uh, you know, tailored to these individuals that need healthcare, not huge amounts of it probably, but that needed to interact with the system in a more affordable way.
And so [00:13:15] that hypothesis is what originally got me thinking about cash in practice, what happened because of, you know, Largely due to the introduction of, again, all of the subsidies that exist. Uh, things didn't play out the way that I expected, but it got me thinking about [00:13:30] cash payment and that eventually led me to thinking about cash payment in the context of employer sponsored health plans, which is, is where we're really focused today.
Josh Taylor: Is it fair to say that the subsidies have maybe slowed your prediction, but you're [00:13:45] starting to see clearly in the market, there's an appetite for it. Cash pay solutions because of the ever rising costs.
Korb Matosich: Yes. I mean, what I'd say is, um, the subsidies slowed the need for individuals [00:14:00] to, to pay, you know, cash out outside of, uh, you know, you know, outside of an insurance product entirely, um, in the sense that the subsidies have allowed many people to get healthcare for free.
The problem is when we provide [00:14:15] healthcare for free, um, we actually, like, like any government subsidized thing. Price points actually go up. I think that's been proven. academically, right? You know, the government subsidize education, what happens education costs go up, they don't go down. Right? [00:14:30] And the same thing is true in healthcare.
So those subsidies drive up costs. Those, those increased costs are punishing employers, which is now creating demand for, how do we pay for healthcare in a more sensible way, which is, [00:14:45] is now beginning to. You know, to create opportunity for this strategy.
Firouz D.: tell me a little bit about the history of this cash payment, because to me actually moved rather fast from a concept to being protected or supported by [00:15:15] the price transparency law that the. Uh, Trump administration brought into, uh, you know, into action, uh, they enacted on it.
So if I understand it correctly, based on that provision, all the [00:15:30] providers must accept the cash upfront pay, or I call it the claimless payment.
Korb Matosich: Yeah. So I mean, when, when you say, uh, uh, things, [00:16:00] you know, move, move quickly, obviously everything depends on your perspective. Right. So we, we, we first started, um, you know, our cash payment, uh, focus back in 2014. And, and obviously we can't [00:16:15] claim to have invented cash payment for health care. Um, that's the way health care was paid for back when it was affordable, right?
So this is a, in many respects, this is a back to the future strategy. So it's not like we invented the concept, but we, [00:16:30] um, we created technology to facilitate cash payment. really for again, employer sponsored health plans. And we started doing that back in 2014. And when we first went to market, we were met with a bunch of blank stares, right?
I mean, [00:16:45] people just were like, what are you talking about? And you can't do that. Some people made claims it was against the law. Um, so when we first started on this journey back in 2014, uh, you know, people for the most part thought we were crazy. [00:17:00] Um, the, the market started to warm up. in 2018. Um, and you know, we were getting some significant traction.
The focus of our cash payment approach was, was primarily on elective procedures. And so we were [00:17:15] gaining good momentum and then COVID hit. Right. And I think if you, if you remember what happened to elective procedures and COVID, they went away, right. That all elective procedures were canceled and we were we were guarding hospital capacity [00:17:30] for, you know, those unplanned COVID admissions.
And so that kind of set things back quite a bit. But in the course of all of this, you know, the, uh, I can't remember exactly when the Consolidated Appropriations Act was implemented, or sorry, [00:17:45] when it was passed, um, I believe it was first implemented in 2021. And then those no surprises provisions, um, did mandate that everybody.
Uh, you know, all hospitals, at least, uh, basically [00:18:00] offer a clear cash price and honor it. Um, and so the way that the market's moved in the last three years, yes, it has accelerated. But we've been thinking about this well in advance of the Consolidated Appropriations Act and kind of the more recent [00:18:15] trends of cash payment.
Josh Taylor: So with the, with the trends of cash pay accelerating why are some employers still resisting that change to including cash pay into their health plan from your perspective?
Korb Matosich: Yeah. Um, I mean, so those that, that have most [00:18:45] successfully adopted the strategy have done so because uh, costs are one of their primary concerns, right? Um, the, the, most of them are, are, are kind of forced into doing something significantly different because [00:19:00] their health plan costs are breaking their back, right?
And, and they have to do, they have to do what's required to, you know, to maintain a sustainable, uh, health plan. And so, [00:19:15] Those that fully adopt the cash payment approach, uh, do so very successfully. Um, and our track record in terms of maintaining access to critical care while controlling costs is, is great.
[00:19:30] Um, where, you know, where Where things get more difficult is basically where people want to hold on to the status quo while trying to, you know, [00:19:45] like, they like the idea of things being more affordable, but they don't really want to move away from, you know, the established status quo. And obviously, and let me be very specific about what I mean by the established status quo.
Members [00:20:00] are, have now been trained because PPO networks have been the dominant strategy for the last, you know, several decades. Um, they're, they're, they've been trained that if I need healthcare, I, I need a certain logo on my card and then I will present it to, you know, the vast [00:20:15] majority of providers and they will recognize the logo and they will take me in and see me.
Um, and so again, PPO networks have done a good job of providing access. The problem is that access comes at ridiculous cost. And so, [00:20:30] you know, employers, um, employers are addicted to the logo. Um, if you're going to move away from the logo, uh, it can be done. It's, I think it's been proven that it can be done quite successfully, but, um, it [00:20:45] does require a change management, you know, strategy and effort, and most employers.
you know, are, are hesitant to do that. And, and they're hesitant to deal with, um, you know, the questions that arise that [00:21:00] you're most HR managers, their number one concern is I just, I just don't want noise, I
Josh Taylor: just don't want
Korb Matosich: questions.
Josh Taylor: And to that point, maybe we can talk a bit more specifically about just what does the.
cash pay model that you've been [00:21:15] working on look like from a user standpoint? If an employee is using a cash pay first health plan through their employer, what is that user experience like from what you have been able to build over the [00:21:30] years?
Korb Matosich: Yeah. Um, and this also will dovetail well with why Bowtie and, you know, in my organization, I've been so interested in working together.
So let me talk about. what that experience has been like [00:21:45] historically and then what it's like when you have the right primary care relationship. So historically, um, you know, the key to making a cash payment strategy work is that members need to engage with our, with our support team, our concierge team [00:22:00] prior to receiving services.
So that's what's different. And, um, you know, and candidly, you know, Uh, when people get accustomed to that difference, it actually isn't that disruptive, but at first it's, you know, it's different and [00:22:15] people struggle with different. So they, you know, most people were accustomed to again, presenting their card and that that's what got them access to providers.
We asked them to contact our concierge service before they need a medical procedure or [00:22:30] before they need to make a visit to their doctor. And then, you know, we prepare everything for that. And they pay cash for the service. And, um, and so that journey and that change in all candor, you know, has limited [00:22:45] adoption of our approach because, you know, some employers just say, man, you know, asking my employees to call you before they get services, that's different.
And people aren't going to like that. And that's hard. I think again, change is hard. Um, ultimately it's, it's not [00:23:00] really harder than the current model, but it is different. Um, you know, in the end, I think it ends up being much better than the current model because we'll guide people through the whole journey.
Right. But that's been, that's been the barrier kind of to adoption historically. [00:23:15] Um, the reason why a primary care relationship. solves that problem or the right, I should say the right primary care relationship solves that problem is if people begin their journey. with, you know, what I'll more [00:23:30] generically call an enhanced primary care solution.
Something like Bowtie. Um, you know, they're, they're, they're beginning their journey there. They're getting their care there. We have an integrated partnership with Bowtie where Bowtie will refer members for [00:23:45] downstream care to us. Um, so that the member actually doesn't have to think about calling us before they get a service.
And by facilitating that, uh, That referral, that interaction, it, it, it greatly streamlines the member experience, [00:24:00] right? So that, that is the model that we are advocating for today because it, it leads to a much better member experience.
Firouz D.: And Josh, what, uh, Bob nicely explained, it goes back to really the third misalignment that, [00:24:15] uh, we have discussed, and that is Because of this, this functionality of the existing system, the consumer has forgotten that they are the customer because some of the, uh, basically legal documents [00:24:30] they signed when they go to hospitals and other providers on a blank piece of paper saying that I'm responsible pay whatever you charge me.
Some of those costs are potential, potentially larger than the size of the purchase [00:24:45] they do for their houses or their cars. But they don't realize that they think that that's the core said, you know, some logo on some card is their protector. I think the beauty of what, uh, Corbin, his team is started. And [00:25:00] as you had, we are working together very, very, you know, very nicely is it paves the path for the consumer to become the customer to be involved in the process and the process of [00:25:15] basically.
Pain, shopping and paying for the proper care for the proper price.
Korb Matosich: And if I could just say one other thing, um, to add on to Fruze's comment, which is, [00:25:30] um, the, the, the people do look at those logos as their friends and it is helpful. In terms of, you know, doctors are accustomed to seeing the logos and then saying, yes, if you have that logo, I will [00:25:45] provide you services, but what people, um, you know, don't seem to readily associate with the logo, but it is.
it is absolutely part of it, is every year you get a significant cost increase, right? [00:26:00] Um, every year you're being asked to pay more for your health plan, often your deductible is going up, your out of pocket maximum is going up, right? If these cost shifting strategies have been implemented. Um, because the costs keep going up and [00:26:15] that reality is inseparably connected with that logo.
And, um, unfortunately people have not made that association for the most part.
Josh Taylor: Yeah. And I'm wondering, there's a, you mentioned about change management earlier and [00:26:30] how, you know, the companies that make this switch and are successful are the ones that are really good at change management. Is there a component of that that is.
Revealing the mechanism of why costs continue to go up, because I actually think that most [00:26:45] consumers of care, most employees that are on a health plan, they would say, listen, if I go to the hospital, I get the care that I need. But it costs my employer more. Well, that's not on me. I just pay my deductible, but that the reality is that they're being shielded [00:27:00] from the fact that those costs actually do come back to you and they do come back to you in the form of the increase that you just mentioned.
Korb Matosich: Yeah. So, um, yeah, it's funny. People think, yeah, my [00:27:15] employer's paying it or, well, and all too often. They don't even think their employer's paid pain. They're like, I pay my premiums and that's on the insurance company and they're going to eat it. Right. Well, guess what? Um, in the end, it is the individual that [00:27:30] always foots the bill, right?
Um, healthcare costs have skyrocketed over the last 20 years. Um, average salaries have not. Okay. And what people need to understand is your raises [00:27:45] that you have not received have all gone to the hospitals and pharmaceutical companies, right? The reason why you your standard of living Is not substantially higher is because the hospitals and pharmaceutical companies have, have, have been [00:28:00] increasing their prices and the money that would have gone to increase compensation for you is going to them.
So yes, in, in isolation, you can say, not my problem. I'm just paying my deductible. But if you, if an employer does not address this issue [00:28:15] strategically, what happens is employee compensations lower and healthcare costs are higher. And those that are really good at. change management view controlling healthcare costs as a strategic priority.
They talk about it. [00:28:30] They, they actively discuss with their, you know, with their employees, with, and ideally extend it beyond just their employees, but to the plan members, which are also, you know, their dependents and spouses and so forth. Um, they discuss the strategic imperative of [00:28:45] controlling healthcare costs and talk about strategies to do it.
And the thing is, If once people understand what's going on, they actually, I think a lot of them are ready to engage and become consumers because rightfully so they're mad as hell, [00:29:00] right? When you understand how the U. S. you know, has basically been fleeced by hospitals and pharmaceutical companies. Um, you get mad and you want to do something about it.
And [00:29:15] employers that invest in, you know, again, managing healthcare as a strategic priority, educating their employees, talking about it with their employees, you can make a big difference.
[delete the pause]
Josh Taylor: So if you were to, uh, snap your finger and employers understood the reality of what was going on, what's, what's the first thing that you would hope that [00:29:45] they would wake up and realize that's happening inside of their health plan?
Korb Matosich: Well, um, I mean, what what I really wish that they would would understand is that, um, [00:30:00] the employer that has an employer sponsored health plan plan is in fact a fiduciary and and this is actually being more and more exposed by recent litigation.
Um, that that employers that have allowed health plan [00:30:15] costs to run out of control are being sued by their employees and we expect to see more of this. I'm not a big fan of litigation, so I would love for us to avoid that litigation cycle and just have employers understand I [00:30:30] have a fiduciary responsibility to make sure that my health plan is spending its assets in an appropriate way.
And by the way, Getting a Blue Cross Blue Shield logo or United logo or an Evan logo doesn't cut it. Like that is [00:30:45] completely inadequate. In fact, what you can be sure of if you have one of those logos on your card and that's all you're doing is you're not being a good fiduciary. You're being fleeced. Um, and so I would love for employers just to wake up and say, I have a fiduciary [00:31:00] obligation to make sure that our health plan is spending its money appropriately.
And we're going to educate our members so that they're on board with this. And we're going to implement strategies to fulfill our fiduciary obligation.
Josh Taylor: one last question. when you start down a [00:34:30] path, there are things that surprise you as you travel down that path. What are some of the things that you have been surprised by as you've been on this journey to fix the structure of health care?
Korb Matosich: I mean, so I guess one [00:34:45] of the most surprising things has just been how patient employers have been. Um, I thought that, you know, uh, I thought that five years ago they would throw up their arms and finally say enough. [00:35:00] Um, you know, health care costs have been spiraling out of control. We're not gonna allow this to happen anymore.
We're going to do something about it. And, um, but surprisingly, they've been much more patient with the industry than I [00:35:15] realized that they would be. Um, and unfortunately again, I'm not a big fan of driving things through litigation, but it may ultimately be the Consolidated Appropriations Act and the And the pointed identification of [00:35:30] employers as fiduciaries and their failure to fulfill their fiduciary duty that may drive the change.
Um, you know, I, I would have expected that, that, that they would just kind of band together and say enough, we're going to demand change. Um, ultimately, [00:35:45] maybe the lawsuits aimed at the executive suites of the employers that forces the change.
Firouz D.: [00:36:15] the good news, if I have to kind of the closing remarks from my side is. That, uh, seems to me by connecting this dot, connecting the elements that, again, Corp said it elegantly, the direct payment [00:36:30] for primary care, again, the family doctor, empower them to, uh, basically, uh, be the problem solver for the, for the members, for their health needs, and then be their advice and guidance, [00:36:45] and SHERPA navigator for, you know, the rest of their needs, and then coupling that with, uh, Basically upfront cash pay.
Uh, it's really is a rather simple, but very, very potent solution. I think the sacrifice and the risk taking of people like Corp, you know, his partners on our side is the one who is going to move this rebel camp forward. And [00:38:30] frankly, again, as a person who's just spent his entire life in healthcare, this is the, this is one of our best hopes.
We have this magnificent. Providers technology in this world. If we solve this dysfunctionality in the [00:38:45] health in the US, this will be another big chapter for creation of value and well, very much like the technology and the rest of it did for us for the past 30, 40 years. So I'm I remain [00:39:00] very, very hopeful.
We don't need the act of Congress to solve the problem.
We just need innovators such as core risk takers, and then, uh, go from there.[00:39:30]
Josh Taylor: Corb, I appreciate the time and thank you for the discussion as always.
Korb Matosich: Yeah, no, thank, thank you very much for allowing me to participate and just want to, you know, uh, communicate. [00:39:45] My similar optimism for our ability to make positive change. And it's all about, you know, like minded partners coming together.
And, and, uh, um, the, the groundwork that has been laid, I think it's very promising and, uh, [00:40:00] as Farooz stated, we don't need an act of Congress. We just need, we just need, uh, you know, basically employers buying in and moving forward. Thank you so much for your
Firouz D.: time. I appreciate it. Take care.[00:40:15]
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