Dutch Rojas - Healthcare

PBM owns the pharmacy.
PBM owns the plan.
PBM adjudicates the claim.

Three commissions on one pill.

The employer pays all three and gets a thank-you note for the rebate.

Healthcare is the only sector where the government picks the winners, sets the rates, blocks the entrants, and then hires economists to explain why the prices are high.

The federal IDR system is a case study in what happens when you model a market using data from an incomparable system.

Congress projected 22,000 disputes annually. They built that estimate from New York, which used a fixed independent benchmark (FAIR Health) that effectively eliminated emergency billing disputes.

There was almost nothing to measure.

Texas had a comparable system.
Arbitration-based, like the federal model. 49,000 disputes in year one, covering 20% of one state.

The federal government had the Texas data. They built from New York.

By 2024, actual volume hit 1.46 million.
More than 100 times the projection.

The infrastructure collapsed.
The backlog exploded.

Physicians waited an average of 150 days for a 30-day process.

A projection error of this magnitude, using available contrary evidence, requires either incompetence or a preference for the outcome it produced.

They Called It Patient Protection. Physicians Are Still Waiting to Get Paid. The No Surprises Act created a dispute resolution system built on a projection that was wrong by a factor of 100. The physicians treating emergency patients absorbed the consequences.

California Medicaid now covers “activity funds.”

Sports clubs.
Exorcisms
Gym memberships.
Bikes.
Scooters.
Roller skates.
Music lessons.
Art lessons.
Summer camps.

At this point, Medi-Cal looks like a liberal arts college.