001 - The Insurance Industry’s Biggest Scam Explained with Dr. John Osborne | ClearCardio

Hi, and welcome to Clear Cardio's Prevention is Power podcast, where we uncover the truths about our healthcare system and empower you to take control of your health. I'm J.D. Enright, your host, and today we're pulling back the curtain on the insurance industry's biggest scam. Did you know the insurance companies make billions of dollars every year by betting against your health? They profit by keeping you sick and delaying the care you need until it's too late. Joining me today is Dr. John Osborne, our Chief Medical Officer, a Harvard-trained cardiologist, and a leading voice in preventive cardiology. Together, we're going to expose how insurance companies gamble with your life and what you can do to take back control. Dr. Osborne, welcome to Clear Cardio Podcast today. It's such a pleasure to have you here. And, um, you know, this is one of the biggest things that people are talking about today. I mean, just recently we had, uh, The issue with the CEO of UnitedHealthcare, who was gunned down in the streets in New York. That was a tragedy. I mean, no one ever wants to see that. But that you had such a polarized situation going on throughout the country, not just in the country, I think outside the country, looking in on what the United States healthcare industry looks like, where you had on one side, you had people who were obviously upset. that someone was gunned down on the street, no matter who they are. And I'm one of those people as well. But at the same time, you kind of understand that people are upset and they're tired of what they believe is being taken advantage of by the healthcare industry and the folks behind it, which includes the insurance companies, quite frankly. So what are your thoughts about that, Dr. Osborne? A leading cardiologist, a preventive cardiologist, someone who really thinks about preventive medicine. What are your thoughts about what happened there and what the people are thinking these days?

Well, thanks for having me on, JT.

Of course, yeah.

It's an honor and a pleasure, and I think we're going to be able to shed a lot of light on this very, very engaging topic. I'm going to tell everybody, sit back, relax, You're going to be shocked and astonished.

I'm excited, I can tell you that.

Good. Yeah, I think the event that happened in New York with the assassination of the CEO of UnitedHealthcare is really kind of a tragic thermometer into the feelings that people have about the insurance industry. One thing I'm going to tell you as a provider, so this is my 28th year in practice, Has it been 28 years? It's been 28 years.

Wow. You'd never know.

So it's been 28 years. But one thing that always galls me about the insurance agency— insurance companies, rather— and their ads, right, that you see all over the place, right? Magazines, TV, et cetera, is they always pretend that they provide healthcare, right? UnitedHealthcare, Right. And they don't. They're purely a financing system, right? It's like your bank saying, well, if it weren't for us, there'd be no money. Well, yeah, I'm sure there would be. You guys hold on to it, maybe get a little interest, manage checking. But, you know, so I always think it's, it's kind of amazing to hear insurance companies say they offer healthcare and they don't.

Yeah.

They're just a financing organization. You know, it's the providers who offer healthcare to our patients, right?

That's okay. I understand that. It's so really, they're not providing the healthcare. They're, they're just providing more or less like a funnel to get to the healthcare.

Right. They're, they're a credit card, right, that we just happen to use for healthcare.

That you have to pay in advance, by the way.

Yeah. I mean, you know, to the best of my knowledge, my credit cards don't do anything For my healthcare, right? They just finance things.

Yeah. Or not. In many cases. Or not.

Which is one of the biggest problems. Imagine you had a credit card where it goes, well, sometimes, maybe half the time, use your credit card and I'll just say no. Right? Well, that's crazy. I'm going to pay for this. It's my money. And you're not allowing me to buy what I want to buy.

It's actually way worse than that, right? Because if you think about it, if you're using that analogy, Using a credit card to purchase something and your credit card company, the bank in this case, having the say as to whether or not you can buy that car or you can buy that shirt or you can buy or pay for your child's school or something like that. If they were able to dictate that, that would be— that's bad.

Yeah.

But take that to the next level where your life depends on it. It's your health. It's the health of your children. It's the health of your wife or or your spouse, your husband, or your partner. To me, wow, that's a really interesting insight. I hadn't thought of it that way.

Yeah. And so it always galls me when you hear these ads and they're beautifully produced and they give you that sense of warm fuzzies and, oh, isn't that sweet? And all that stuff about UnitedHealthcare being there for you and providing your healthcare and all that.

No, they're not.

Just a credit card.

They're a bank effectively, right?

They're a bank. Except this bank says, oh no, yeah, You don't really need that purse. You don't need those shoes.

Yeah.

Or whatever else you want, right? I mean, we wouldn't accept that. You'd immediately get another credit card.

But we're just accepting here.

Unfortunately, in this industry, you only get one credit card at a time. That's it. You can't whip out another one and go, oh, well, that credit card doesn't work. I'll use this one. So, they're just financiers. Their financing system.

Why do you think that is, Dr. Osborne? Why do you think it's gotten to that point where we are so, as Americans, because I've traveled quite a bit, fortunately, in my lifetime, and I'm 57, and I've spent time and I've got friends who are from other countries, both are Americans who've lived abroad, like Portugal, for example. which has a fantastic low-cost medical industry where you get great care and you're not dealing with crazy insurance issues like we're dealing here. Why is it so difficult here? Why has it become like this in the United States specifically?

A lot of it is it's a massive, Massive, massive economy, right? It is trillions of dollars a year. Not billions. It is trillions of dollars a year. We operate about a $35 trillion economy, roughly, in the US, everything, all told. 20% of those costs, $7 trillion a year, are healthcare costs.

Wow.

So it is a massive economic You can also imagine that lots of people want to be involved in something that we're talking about $7 trillion of money.

A wealth generator.

Yeah, it's a wealth generator, right? But also you can imagine there's lots of people that want to be involved in that economy as well.

Yeah, right.

Yeah, hopefully many for good reasons and to benefit people and patients. Unfortunately, some not so much. But when you have that much money, it's a massive magnet for people to get involved, and their intentions may not be to foster the best level of healthcare.

That's a really good perspective. I've been in business a long time. I've been doing business a long time. I'm an entrepreneur. We'll be talking in some other podcasts in the future about my journey in the healthcare industry, in particular why I chose to partner up with you to create Clear Cardio in the first place. But backing up a little bit before that journey, you know, just in general, I've invested in a lot of things. You know, obviously entrepreneurs, we invest in ourselves. Primarily, but also as we start to see success, we start you know looking, reaching out and investing in more passive types of things where we're not directly involved in the operations side of things. And so I've had the opportunity to look at investing in various healthcare-related endeavors, and I chose not to—not at the time because. I was against it. It's just I didn't understand it that well because it can be quite challenging to understand. What I have learned though over the years is that a lot of it is venture capital backed, private equity backed. I think in the early stages of investing in a healthcare company, whether it's an insurance-based company that you're investing in or a medical group, because I've seen that a lot and I've seen And we'll talk about that here in a few minutes. I'm really interested to see what you have to say about how doctors are consolidating and how private equity and venture capital money is coming in and it's becoming more and more like a business and less and less like a private practice where you get, you know who the doctors are and they know who you are. And it's not a revolving door, right? It's not like holding you accountable. But backing up, I noticed I noticed that, um, as I've learned about the healthcare industry, specifically as the CEO of, of Clear Cardio, it's, it's a real big business. And, and that has evolved over the years. I mean, when you started out in, as in your medical practice, right, you said you've been doing this for almost 30 years.

Yeah.

What was it like then? And, and in your opinion, has it, you know, has it really evolved that much to the point where It's uncontrollable? Oh, absolutely.

I think because it's a massive, highly lucrative marketplace that attracts the attention of business, and there's nothing wrong with that. That's perfectly— I mean, that's great. But it also attracts the attention of the government.

Mm-hmm.

And I think there are many, many things wrong with our system. One is it really is terribly, horribly overregulated by a variety of people who have no idea and no concept and no training in healthcare, but at administrative levels. In fact, if you look at the ratio of healthcare providers, the people who have licenses that you see that make diagnoses, treat you, et cetera, they are dramatically—

Overrepresented.

outflanked and outnumbered by administrators.

Hmm.

Roughly, it's about, if you consider all the levels of administration in healthcare, including insurance companies, hospitals, et cetera, and again, we have to have people that do that, obviously, but the ratio of 10 to 1 of administrators to providers seems a little Wrong, in my opinion. 10 to 1.

So what was it when you first get, you know, when you decided, hey, I want to go out and help people?

Yeah.

Right. Because I have great respect for the men and women who are doctors and nurses and who are out there, you know, at the front lines. People like yourself, 30 years in the business. When you first decided that you wanted to come in and do this, what was it like then? Like, what was your Could you have ever forecasted it would be like this 30 years later? Or was it still like it?

Not really. I think if you go back and look at people predicting the future, forget healthcare, yeah, we should be all flying around in flying cars and be George Jetson. Well, that wasn't so correct, right? Yeah. And so it really is hard to predict the future, but I never would've thought that we would be spending this much money and getting so little. And we see this massive upside-down pyramid of the providers at the bottom of the pyramid and this massive number of administrators that costs a lot of money, watch over everything, but actually don't diagnose people or institute therapies.

So they actually add no real medical benefit to the patient.

No. I mean—

So this upside-down pyramid is, you've got— I just want to make sure I understand this visual, because it's a really interesting visual. Like a pyramid standing on its point, right? Yeah, exactly. And it's not very balanced, by the way.

And on top of that, where do you think all the pressure on that pyramid is?

Yeah. No, exactly. And that's going to be a good conversation here in a minute. But so you've got this. And so up here, you've got all the bureaucracy. You've got the pressure of all the investments. You've got, then you've got the administrators, both on the insurance side, the government side. You've got—

The hospital side.

The hospital side, right? The suppliers and all that management. And then it's all coming down to the doctor, the person that walks into the office. Like, I could tell you, and I can imagine what it must be like in Canada right now, Because I know there we have people who work in Clear Cardio who are Canadians, and they talk about it quite often. Yeah, is that it's it's six months to get in to see a doctor. That's insane, and the costs are outright. Oh no, it's a free healthcare, but but but the the bureaucracy is just so intense. But you've got you've got one doctor down here, he or she, the provider, and all of this weight on top of them, and so the pressure from. The investors who say you've got to do 30 heart casts a month or you don't get that bonus or whatever it is, right? Or you're not part of our group.

We'll find the guy who will.

Yes.

Or the woman who will.

That's right. Right. So it's all that pressure and then the pressure on all the paperwork and the follow-up and the HIPAA requirements and all of the government requirements and all that stuff. And really all I want, and I think most people want, is just to go see a doctor when they don't feel well, or to trust the person that they're going to see, he or she, their provider, their, their general practitioner, the cardiologist like yourself. You know, if you have cancer, the oncologist, one that they can speak to somebody because they're in pain or they're worried about their loved one who's in pain, um, or ill. They just want that one-on-one connection. Where's that trust barrier? And it's gotten so difficult, it seems. What are the answers to that? I mean, how do you solve that?

Yeah. And as a provider, I mean, you're my world, right? I'm going to tell you. So I'm going to admit to you and the public, I don't have patients.

Ah.

I have a really, really, really extended family.

Okay. Well, that's unique. That's rare.

Well, but—

Explain yourself. But you're not in—

That's how I—

Yeah, but you're not in a group.

No.

You're a private— so why don't you tell a little bit, tell the audience what it is you do? Because that's very unique today.

Well, it is unique. I mean, 20, 30 years ago, certainly 30 years ago, it was typical, right? So nowadays, and I'll compare and contrast. So nowadays, if you see a provider, and I say that because it's no longer— we have lots of different kinds of providers out there. We have docs and MDs and DOs and mid-levels, nurse practitioners, PAs, and lots of other providers too. But pretty much all of those largely are either going to be part of a large, very, very large group, many times sponsored, run by equity and—

Private equity investors. Yeah, for those of you who may not know.

Or or a hospital. And whether that hospital is for-profit or not-for-profit, you really— it's pretty much hard to tell the difference as a provider, right? Because they all have CFOs and MBAs and all of those people that make the organization go, you know, do what it needs to do. And that's, again, very, very important. But 30 years ago, it was pretty much everybody was on their own, one-off. You go see Dr. Osborne or Dr. Jones or Dr. Smith, and they all had their own Little practices. And even whether you were internist, right, you're adult medicine, right? Or a family practitioner or a specialist like cardiologist. You know, I would have office hours, I'd see patients in the office, and then I'd have— and I'd round on all my patients in the hospital. So the beautiful thing to that model would be if you got sick and you were one of my patients in the hospital, I would be taking care of you. You know me, I know you.

How would you see those patients? So that's— That sounds like the perfect world, by the way.

Sure.

So how would you get— was it just referral from other doctors? How would you get those patients?

Well, so some of my patients may get sick. Well, my patients wouldn't, but some patients would get sick and they end up in the hospital and they'd say, you know, this is Nurse Ratched and Mr. Jones is in the hospital. Okay, no problem. I'll see him either, depending upon the time of day and all that, either first thing in the morning before office starts or I'll I'll see him after work and I'll round on him and say hello. And I know him and he knows me and it's a beautiful thing. Or in the hospital, I would get a call. This is Dr. Jones, internal medicine. We got a patient. I think he has a heart issue. He's got a heart rhythm problem. He's having chest pain, whatever, but we need the help of a cardiologist. And so it would work that way that I would be consulted and they would then call me and then I'd go see the patient in the hospital. And then once that patient got out of the hospital, they would come and follow up with me. And it was a beautiful little system.

Well, then it changed. Then things changed.

And I will tell you, the main thing that changed was the mandate that goes back to roughly about 2010. So we're talking 15 years ago.

15 years ago. That's actually not that long ago in the grand scheme of things, but still, 15.

They still called me Doogie Howser back then, but no longer. EMRs. So the government said you must have an EMR. Okay, so those—

for those of us who aren't— haven't been in the '30s— an electronic medical record. So EMR, electronic medical record.

Okay. Right. With the idea that you document everything in the electronic medical record, the EMR, and that way, you know, it's a good medical tool. You know, other providers that might be taking care of the patient or the patient care is transferred to. Everything's well documented, it's electronic, it flows over wires and electrons and all that rather than pieces of paper.

Like they used to do when I was a kid. When I was born in the late '60s, early '70s, there weren't computers, right? We didn't have smartphones. It was a piece of paper.

And if you wanted to get that piece of paper, you needed to find out— it was a big, big deal, right?

Got it. So the EMR comes into place in 2010.

And certainly a lot of And this is part of the ACA, the Healthcare Act of 2010. And so certainly has some advantages there. And you've got this repository of notes and data and labs and stuff.

So it was intended to be a good thing.

Exactly.

To be able to have more information.

And at the same time, the people that finance healthcare—

Okay, got it.

Now they had a way to make sure you're doing what you said you did. And then they could also say—

So, like Big Brother to the doctors?

Big Brother. And then also that, that not only you did what you said you did, but, you know, how much work did you really do? Was it actually a little bit or was it a lot? So, the other flip side of this was a beautiful thing for the people at Finance Healthcare to, A, document, I'm doing what I do, and then better assess, well, was that a little bit of work or was that a lot of work? And then hence the reimbursement. So on the face, and also a great communication tool, right?

Reimbursement to the insurance companies?

Well, reimbursement to the providers, to the hospitals.

Okay, to the hospitals. Okay.

Exactly.

Okay, got it.

So you can see it sort of made sense, right? Well, here's the problem. In reality, doing all that paperwork, Much of which is terribly repetitive, much of which, you know, there's— if you ever look at a chart, it's pretty amazing. I mean, there's the stuff like, you know—

A patient's chart. Like, if you go to the back—

Yeah.

Like, when I think of a patient's chart, you walk into the doctor, you walk into the hospital, there's a person in a bed, right? At the bottom of the bed, there's a little thing and it's got a chart, and the doctor pulls it out and it's like Dr. House, and he opens up the thing and he goes, yeah, well, you have here, here, it looks like you have this and this and this. That's the chart. But now you're talking about An electronic version of that.

Now it's just electronic, right? It's all on computers, right? Which again has the advantage, I can collect a lot of data electronically, I can put it all together, it's a beautiful thing.

There's a lot of advantages.

Exactly. But who's going to put in the data? Well, nurses. Well, yeah, because they're taking care of the patients. Doctors. Yeah. Nurse assistants, doctor's assistants, of course. So suddenly all of these healthcare providers, they were busy providing healthcare at all the different levels that they do, because it really is an ensemble cast, right?

Yeah. It takes a whole village.

Well, now half of their time was doing paperwork, was doing secretarial work, not seeing patients, changing bedpans, listening to the heart, doing all this stuff.

Having a conversation.

Having a conversation.

Having good bedside manner.

Yeah. Finding out What the patient's needs are, what's going on, figuring out the diagnosis, talking about the patient, educating the patient, talking about here's what we're going to do, here's why. All that's incredibly important. Well, we still have to do all that, but literally half of the time, and it can be even up to two-thirds of the time, is now spent not talking to the patient and taking care of the patient, but on the keyboard typing. Stuff into the electronic record.

Which is intended to be a business tool.

Yeah, it's a business tool.

Instead of a healthcare tool.

Right. So if you look at primary care, it's fascinating. A study a while back, probably 10 years ago, said in order to do all the things that a primary care has to do, right, see a lot of patients, take care of a lot of patients, educate, prescribe, diagnose, and then document all this stuff, And then look at labs. You got to look at labs all day long, right? Patients came through, labs are back. You know, there's just a lot of stuff you have to do. It takes about 23.9 hours a day to do the work of one primary care doc.

Wow.

So one 24-hour day is 23.9 hours worth of work that has to be done.

And no one person can do that. So you've got to have a lot of people doing that.

Right.

Per patient.

And then the concept of something like a scribe. So scribes are people who sit there with— because there was the understanding that we're all being horribly overburdened by secretarial work, right? Okay, no problem. We'll just hire another person. One more person in the big army that comes in and takes care of you. This person then sits by the side of the provider and provider asks questions, blah, blah, blah. does exam X, Y, and Z, says, I think you have this, I will educate you on whatever that is, and here's the plan. And the scribe then takes all that down, and then he or she then puts that data into the database.

Interesting.

So clearly a degree of efficiency so that I can do more doctoring type stuff. But now we got one more person on the payroll. And then of course, there's QA to make sure that the scribe is writing and putting in the The proper stuff.

The checks on checks on checks on checks. And it all goes back to this new policy that they came out in 2010.

So that really changed medicine a lot. And also too, by the way, adding cost to the whole systems. Generally, these systems, particularly if you were installing them de novo, right? So you're just starting with paper or nothing or whatever, were generally extremely expensive. So we're talking And this is in 2010 dollars, roughly about $40,000 per provider.

Okay.

That's a lot of money.

Yeah.

And that $40,000 doesn't go into you, your medications, your diagnosis, your workup, you know, all the stuff we gotta do. That was just, here's a big check written to the people that provide the software.

The administration.

Right. So that really didn't help anybody per se and directly, but was a big, big cost. So then the government comes in and says, no problem. We're here to help. We're going to underwrite the cost of your EMR. Okay, great. Well, all that does is make the EMRs—

So they were paying for your software?

Oh yeah.

They were underwriting the software and all this stuff.

And so why do you think it was $40,000? Because there was a third-party payer called the government that was underwriting the cost of that.

Mm-hmm. Got it. So it was like free money to the folks that were writing this EMR software system.

It was like, it would be $40,000? That's ridiculous. $4,000 maybe, but it's $40,000 because—

Because everything costs the government 10 times as much. Right. Well, it'll be interesting to see how—

It's the $10,000 toilets.

Yeah, fair enough. Yeah, no, I remember that whole thing that came up. Yeah, gold toilets. Right. So, so, so, well, now—

You can see this gets very, very complex. There's a lot of moving, moving gears here.

Well, especially now with the new, you know, whether you're pro-Trump or against Trump is irrelevant because he's the president, right? So, um, but The whole idea that Elon Musk is going to come in and he's going to look at government efficiency, right? I suspect— and then you've got Robert, RFK Jr., who's really taken on this lead healthcare, kind of keeping them in check, right? Our healthcare system is broken, I think he's said a couple of times.

And if nothing else, focusing on health. Yes. Who could Who could deny that or not support that?

Exactly right. So you've got this movement now in the new administration. Do you see that being pulled back, like all of those subsidies and all of those things, and that will have some type of dynamic impact to insurance companies? I mean, a man was murdered in the street of New York, and the country was in many ways split And as we started, when we started this discussion, and that's pretty dynamic. And so, what you just described is this evolution of more and more and more burden on the healthcare, on the providers, right? Policies, procedures, software costs, things like that. And there takes more investment for that to happen. Investors want to see a return on their money.

Sure.

Insurance companies are being put in a position where, I mean, let's face it, insurance companies make a lot of money, right?

Oh yeah.

I mean, they make billions. You said this is a multi-trillion, $7 trillion?

$7 trillion industry.

That's insane.

Per year.

I don't even understand that. That's crazy. So, you know, they're obviously making a lot of money. So there's gotta be a lot of room there to cut back on that, right? So that people aren't so angry, right? So you've got, cheaper healthcare. And more importantly than cheap healthcare, I know that's important to me, it would be better healthcare, right? Preventive versus reactive. And we're going to have a whole conversation on another podcast about the importance of, you know, preventive medicine versus reactive medicine, how a lot of the country focuses on preventive versus reactive. Because as a business guy, As a business guy, being reactive is the most expensive thing you can do. Of course, it's all about planning. Like, as a project manager or when you're running a company, you never want to have to react because it's always more expensive. So, but we'll get to that. So with this new—

We're building a house and I want some changes.

That's— yeah. And you know, it's always change orders are expensive, right? So, so the last thing we want is, is, is in our health, you know, health waiting to the time when we're sick and now you're spending $20,000 on a catheter or whatever. But backing up, do you see this being a good thing, whether you like them, the new regime or not, the new administration or not? Do you see this as a good thing that's coming down the road?

So my answer to that is going to be pretty quick. One, we're very early into this. Number 2, we will see.

Into the new administration, you're saying? Into the new administration. Okay, gotcha.

Right? So we'll see. I am hopeful.

We're all taking a wait and see here.

Optimistic, hopeful guy. But I will tell you though, this stands in the face of history where things like this only get bigger and bigger and bigger, right?

Yeah.

I mean, but I think if it were to change in the favor of patients, in the favor of more efficiency, right? Let's spend a lot. I mean, it's fine. I mean, 20%, okay, that's fine for healthcare, but let's get $7 trillion worth of value, right? I mean, we've already decided or—

That's crazy.

Defaulted, probably not the world's greatest term, but we've said, okay, we're gonna spend $7 trillion, right? I mean, that's where we're at, but let's at least get $7 trillion worth of value from that. And I think the one thing about this administration, I'll give everybody a chance, is I think honestly, if anyone can do it, and this isn't partisan at all, just because I think our current administration is known to say, no, this is not acceptable. We're going to do something different, which is fairly unique. But I think if any administration can do what historically has been almost impossible for government-run entities, of which healthcare is largely a government-run entity, right? My joke is—

Now, that's an important comment. That's an important comment to understand.

Oh yeah.

For our listeners out there, it really is, right? It really is a government, almost like a government division.

It is.

Healthcare is regulated. The insurance companies are regulated. The only thing that isn't regulated is the money that goes into them from an investment perspective. It's unlimited amount of private equity, venture capital can go into it. But once it's in, then it gets regulated, which is why a lot of people don't invest in that business.

And where does that regulation come from?

Right.

The government. So they spend the biggest chunk of that healthcare cost every year. And obviously, we have UnitedHealthcare and commercial healthcare providers, et cetera. to take care of generally those below 65. But where do those rules come from? They're dictated by the government.

Yeah.

Right?

So is it fair to say, and I'm trying to put you on the spot here, but it begs the question then, if the healthcare industry is largely regulated by the government, then is it fair to say that things like what happened to that That's the CEO out there, and that the angst that's been built up can be partially— the direction can be pointed towards government being at fault in a way, allowing this to happen, and then once it's in place, kind of driving that regulation forward.

Yeah, I think that's part of it, and in which case, in public, we have this public discussion, which is really bizarre. A guy gets killed, assassinated, And some see him as a martyr and others see him as a criminal. So where's the reality? So it's bizarre times we live in.

Yeah.

The other thing I will tell you is that I think the 2 organizations, government on one side, and we'll say private payers on one side, insurers. The insurers, in order to make money, make a profit, and again, I mean, no margin, no mission. I mean, they gotta make money since they're in the private space and provide the service. But then the question is, how much do they keep? Where does it become funding the organization and the mission versus unacceptable taking advantage of people? How do we fix it?

How do we fix this? A little bit more about your background. So you're a cardiologist. You're a really good— you're actually my cardiologist. Yay. I'm happy. I'm lucky to have that. I'm glad you're happy. And a lot of my friends, you're their cardiologist. And, but you're a Harvard-trained cardiologist. You're also a lipidologist, am I— is that—

Yeah.

So you've got that, which is like rare, I understand, to have both of those things, right?

There's about 107 in the US.

Wow. That's not many.

No.

Yeah, because there's thousands of—

2 per state, including Wyoming.

Wow. Okay, so that's super special. And you've got a lot of other things you've done, and you lecture, and you travel around the world, and you're experts in a bunch of things. And so, you know, if anybody would know how to fix this, I'd say you have some insight into that.

I think this very simple answer is this, and I can say this to you as a business guy, right? Capitalism and transparency, right? Just, we need financial transparency, right? Well, I'm going to get this test. This is how much it costs. And this is what we're going to gain from it. Just that. Yeah. And rinse, lather, repeat. Right? Yeah. I think if we had more of that, or I'm going to recommend you take this drug. Here's what it costs. Here's the value from it. Side effects, things, and and and just transparency. Right? One thing, and and and and I will say I have my bias. We all have our biases. But you know, you hear a lot about pharmaceutical companies, right? And oh, I mean, pretty much every time most people think of pharmaceutical companies, it's debatable whether they think they're just a little bit better or a little bit worse than insurance companies, right? But not—

Aren't they all kind of connected? Aren't they all in cahoots with each other?

Again, insurance companies are just, they're the financing organization, right? Okay, you gotta finance this stuff.

But they also dictate which drugs you can and cannot get.

They do.

Right? So that's, to me, seems a little kind of a conflict of interest.

Where at least pharmaceutical companies, They produce the tools that we use that help us occasionally cure, treat most of the time, and then hopefully prevent most all the time, right? So they really are innovators that allow and that give us the tools that we have, right?

Yeah.

And what's fascinating is you hear all about pharmaceutical companies and insulin costs and all of those things, right? I think we're all very, very aware of that, no matter what you do, whatever your background is. If you look at the total healthcare pie, right, there's the circle, right? So this is something not everybody knows, although it's very easy. You can go Google this in about a minute.

Yeah.

The percent of that pie that has been spent on pharmaceuticals is roughly in the range of 10 to 13% of the $7 trillion.

Which is relatively small, Matt.

Relatively small. And you know what? It's been 10 to 13% for decades. Now, the pie has gone like this.

Right. So the money is much bigger, but it's still a percent.

Percentage-wise, it's about the same. You know where the vast majority of our money goes in healthcare?

No, where?

And we'll forget administration, right? I'm talking about—

So carve out the administrative employees.

Yeah. Right.

Most of our money, When we pay into the system—

So if you think of a pie, you got that little tiny crust out here. That's the part that is the stuff that goes to health— providing healthcare. The big part is, of course, administrative. But ignoring that, yeah, so 40% of that healthcare pie is hospitals.

No kidding.

40%. Now we're talking some real money.

Wow.

And the providers, well less than 10%.

What is that?

$3 trillion? Yeah.

$3 trillion goes to the hospitals.

Yeah.

For what?

For the providers, a very small slice.

Yeah. I've spoken to a lot since—

And by the way, because we're going to be controversial here. I told you, sit down, sit back, relax, and be astonished. Here's our new slogan. You know who has the biggest healthcare lobby in Washington on K Street?

No.

The hospitals. Bigger than pharma. Far bigger than pharma. Pharma spends a lot of money on it.

What are they lobbying for? What are the hospitals lobbying for? It sounds like a big monster, like the hospital monsters out there to get you.

They're lobbying to get the biggest slice of that healthcare pie. So as an example, here's a fantastic example.

Government subsidies and things like that?

Well, remember, government subsidies is what We call Medicare and Medicaid.

Yeah, fair enough. Right? Yeah. Many Americans need that, right? Especially, and we've been paying into it for years.

I completely agree. Yeah. But as an example, if you look at, so I'm going to admit to everybody here, okay? I'm a unicorn. I'm a Sasquatch. So you can say I saw a Sasquatch today, a unicorn. Right? Okay. And I say that because 30 years ago, everybody was on their own. You ran your own little practice. You saw people in the hospital. You saw people in the office, blah, blah, blah.

So unique because you're running your own practice, a private practice.

Yeah, private practice.

Independent. No insurance. You don't take insurance at all?

No insurance. Yeah. I'm not affiliated with any hospitals, right? I'm not part of some big medical group that's underwritten by venture capital or whatever. Right. I'm a unicorn. So you can speak the truth.

Without any representation.

I'm going to say I have minimal, if any, conflicts of interest, right? Because I'm about my patients and how to best take care of my patients. And we'll delve further into that in some other podcasts. But here's an interesting little tidbit, back to the financing and such, right? And the massive hospital lobby that the hospitals have is, and I'll just refer to to my world, right? In my world, you might go to a cardiologist and they might order a stress test. Maybe if that's funny or equivocal, then maybe a heart catheterization, all of which we'll talk about later. What's fascinating is if I were to do that in my office, and I got stress test machinery, a treadmill, we'll say, versus going to the hospital and having that same test done. So exactly the same test.

Yeah.

In fact, I could be the one in the hospital Observing, watching over the stress test, right? Because you have to have a doc involved and monitoring and make sure it's safe. So whether it's in my office or in—

So by law, you have to have a doctor there?

Yeah, right. I mean, because something could go sour, right? So you want somebody there to monitor it. So what's fascinating is the cost to, let's say, UnitedHealthcare or Medicare, it doesn't matter. If I do that stress test, exactly the same stress test— I'm there actually observing it— versus doing the exact same stress test in my office, they will pay the hospital for the exact same product 3 times more than if I do that in my office.

Why?

Because they have a lobby.

Wow.

If you're a hospital, would you like to have your stress test paid out at 3 times? Because you're a hospital, we gotta pay for lots of stuff. Think of the children. Think of the pregnant women. Think of all the free care we provide in our emergency rooms, which they do and they have to. That's federal law, by the way, which I get.

I'm sorry, they have to provide emergency services for free?

Oh yeah, it's called EMTALA.

I've never been given emergency services for free.

No, but if you have no insurance, they cannot send you away. It is against the law.

No kidding. Okay.

Yeah. I mean, massive things.

Well, that's a good thing.

I mean, that's a good thing. Right. Again, on paper. It sounds great. But yeah, so as an example, you go to— so they're gonna say, they're gonna argue, pity us, poor us, you know.

Fair enough.

We're paying for all this other stuff. So we need to make more money from the same test that's done in the outpatient arena, not by docs that we own or control. They're gonna get 1/3 of what you pay for exactly the same test as the test we do in the hospital.

But that doesn't seem right. I mean, yes, I could see how there could be some increase in requirement because you've got a big brick-and-mortar place, you got whatever obligations, some obligations, and you're doing some free work because it comes in and people don't pay their bills, whatever. But it's also a business and they have to stand on their own just like any other business. I've never been subsidized in any of my companies ever, right? If I can't pay the bill, they shut me down. I lose my job. My investors lose. So it's sink or swim. I get that there needs to be some way to support the folks who can't afford it. Absolutely. 100%.

But that's just a little angle.

3 times that amount of money.

Because they have the biggest, biggest lobbying budgets in the nation.

Because they have a political action committee in Washington, D.C., out there just funneling money to the politicians and all this stuff so that they can get significantly more money in. And that's so interesting. And so they put pressure on the insurance companies as well, right? To do the same.

Right. Well, and the other thing too is, so, geez, I'm barely making it, right? The money's got to go somewhere. So if it's all going to the hospital, so my reimbursements continue to go down, down, down, down. Inflation goes up, up, up, up. Costs go up, up, up. Unfunded mandates.

As an independent practitioner.

Unfunded mandates. Well, you have to do this. You got to buy this software. You got to, You know, whatever, keeps going up.

You need an EMR.

EMR, right? So—

I think we pay like $700 a month or something like that for a very small EMR system that we use. And, um, but it's necessary. And then on top of that, we're paying for HIPAA compliance regulations and all that stuff.

Yeah. So lots of costs and those all keep going up. But if you look at Medicare revenue and Medicare reimbursement, and I say that's important, Right? Because here's one thing you probably don't know. If I see somebody in the office, according to Medicare, depending upon how complicated a visit that is, I will get reimbursed at some rate. Okay?

At your private office?

At my private office.

Okay. Not the hospital?

No. Okay. No, if I see someone in the hospital, I get reimbursed for hospital work as well. Okay? But that reimbursement rate is $30. Okay? Which is not really far from really what we get paid. Despite inflation occurring and costs and unfunded benefits.

$30 for a visit?

Oh yeah.

That seems really low. Yeah. Well, I mean, it's great for the patient, but—

It took me 15 years of training after I finished high school to be able to post a shingle.

And get $30 for a visit. Wow. Okay.

And that number has progressively been going down for the last 30 years.

Are they trying to put private practitioners out of business?

Well, so precisely. Okay, so now the hospital is doing the same test, making 3 times much more for that same exact test that I did in my office. Okay, so you can imagine why now in 2025 that there are so few unicorns like me, because you just can't do it, right? Because Medicare says, I'm going to pay you this. And there's no recourse. There's no debate. You can't say, well, no, that's not right.

It's a dictatorship.

It's a dictatorship. And guess what? You know where the commercial payers get their reimbursement schedules? From Medicare. Right? Yeah. So you can't say, well, I just won't take Medicare anymore. Well, no, because your commercial insurers, they're going to pay at Medicare rates. Maybe a little bit more, but it's all based on the Medicare reimbursement.

Now, what's the difference between— and I know we're coming up on it, but I do want to touch on this briefly— the difference between— because I've had this to myself, like I'd walk into a doctor's office, right? Because I get sick like everybody else. And I'd walk into the doctor's office and they'd say, well, if you cash pay, And try to get your own reimbursement from your insurance company, it's going to be, let's just say $700, right? If you go through your insurance, well then you have a deductible, right? And I pay for my own private health insurance, right? Because I'm an entrepreneur, I run my own business, right?

So deductible, right?

Yes. So that's— my deductible's $11,000 a year. And I have 2 children. I have 2 children. One's 22. He's in college. My daughter, who's 18, she's in college. Um, I have a— and my wife. So it's just the 4 of us, private insurance.

But you're all healthy.

But I didn't want— we're all healthy. So I didn't want to have a huge thing, like a huge premium every month. So I opted with a larger, you know, um, thing, you know, cause we're not having— my wife and I are older. We don't have children. We're not going to be having more children. Uh, we have, we've had our 2. Um, so, so, but $11,000 and they said, okay, well, let's just assume that I got through that $11,000 in that year, which I haven't, but let's just say, I did that. They said, well, the insurance is going to charge— we're going to charge the insurance like $1,400. Of course, for a $700— so I just pay cash. Why would you— why doesn't everybody? I know everybody can't afford that. I get that.

It gets back to this concept of transparency.

Transparency.

Just tell me, right? Yeah. And be fair. Yeah, right. Here's why medical costs— I always call it MSRP, manufacturer's recommended Sales price, right?

Yeah.

MSRP. Why MSRP in the medical world is ungodly high, but the actual cost of delivering a lot of this stuff, when you break it down to the little bits and pieces and all that—

When you're efficient.

Yeah, when you're efficient, is a very small fraction. Because we have people that don't pay. Remember I told you, you go to the emergency room, they gotta take care of you. Well, where does that money come from to pay for the square footage, the cost, the tests, the labs? Well, it comes from the guy behind you. Sticks it behind the wall, yeah. Right? Pay it forward. Whether you like it or not. Right?

Yeah.

So there are people that don't pay. There are insurance, federal insurance administrations, right? So-called Medicaid. So Medicaid is for the disabled, people unemployed, things like that, right?

Yeah. Unemployed, disabled kids, you know, those that are struggling in other ways, struggling and Right.

So we have Medicaid. Now, I will tell you, Medicaid pays, and just economically, really, really badly. So most—

To the provider, you mean?

Yeah, to the provider.

Okay.

Most providers just say, I'm just not going to take it, right?

So where do the people go? Where do the people go that are on Medicaid?

You'll find a list somewhere, and you might have to go a long distance. And as it turns out, maybe that provider is probably not the world's greatest provider because they take Medicaid.

Okay, I get it.

But now there are federally funded— to get around that, and people fleeing that because they don't pay very well and such, there are these community healthcare centers that are federally funded and all that. So, I mean, you know, the government tries to put together a variety of safety nets to help people out.

They're giving it a shot.

However, Because of this, because you have a very broad population out there that seeks your services, a hospital, we'll say, right? Some of which pay nothing at all, some of which pay just a tiny bit, or the insurer behind them, like Medicaid, exactly, as an example, pays a tiny bit. And then you got Medicare, right?

Mm-hmm.

And then commercial insurers generally pay a little bit greater than the— than Medicare, but the tables they use are based off Medicare. So they'll just say, oh, it's Medicare plus 10%. Yeah. Right. Or whatever. So what happens is you do not have insurance and you're not covered by a safety net and you have no insurance. You got nothing, but you get sick. You were gambling that year and you go, well, I don't want to pay all the terrible premiums and plus the $1,000.

I've done that actually. I've said, you know what? I just don't want to—

Sure, you go crazy.

I don't want to give money to a company that I'm never going to Like, it just seems like it's going to a black hole.

Sure. It's the Dr. Dirty Harry approach. Yeah. Punk, do you feel lucky? Yes. Sometimes you win. You know, you win sometimes. Yeah. You don't, right? Yeah. So what happens is you who's employed, has a job, makes money, just don't have insurance, right? Don't want to pay insurance or can't afford insurance or whatever, have no government background. When you go to the hospital, you, my friend, are going to pay MSRP.

Got it.

Right? Yeah. Now, the same product delivered to somebody else under insurance or whatever, because, you know, when you have insurance via the government or private parties, they negotiate a deal with the hospital in advance. So for your stress test, the MSRP is $5,000. That'll be $5,000. Okay. Well, your insurance company and Medicare— of course, Medicare being so massive, they just tell you there's no negotiation. Well, they only pay $400. But unfortunately, you don't have insurance. So the bill you're gonna see and be sent from the hospital is $5,000.

Yeah, that's outrageous.

And it's terrible because there's no transparency.

So, so, you know, obviously there's— this is a big thing to unpack, right? And we're not going to get it all in one podcast, of course. However, you know, there's, there's a big push. We've talked about, you know, how you've got big money coming in, investing in, in healthcare, and, and, and providers are, are moving more towards big groups and hospitals, and that costs more money and is costing—

Cover the overhead.

Cover the overhead.

Better negotiation stance, right?

Yeah, exactly. And you've got, and you've got You've got a lot of policies coming in play where requiring these EMR systems, electronic medical record systems, and that's further burdening the system. It has benefits, but also has the negatives.

Sure.

And then you get the insurance companies who have big lobbyists and are dictating what you can and cannot do. I know personally, I have friends and colleagues who have gone to you or other providers for you in cardiology, where you've recommended medications, And the insurance company said, absolutely not. We're not going to pay for that medication because the pharmacy, the pharmaceutical company that's manufacturing the drug, the price is too high. And so they put up all these barriers of entry to get to that medication, which you as a practitioner, as the expert of the one 20, 30 years in the business who know what's going on with that patient, are recommending that medication, yet These people who are not doctors, right, in most cases—

Oh yeah, no, no.

Who are just bureaucrats in a healthcare insurance company are sitting behind a desk and going, yeah, no, yeah, nope, nope, nope, nope. And so you're having to give them alternatives if you want the patient to be able to afford through their insurance company, through their pharmaceutical card or whatever it is that they get, when they get their prescription, their prescription coverage, so they're not paying $1,000 a month, right? And so you see this, it's, it's like an epidemic. So, so I see all of this firsthand, and, and I say to myself, who gave them that power? Because they're not practitioners. It should be the practitioner who dictates that, not a bureaucracy, a corporation backed by venture capitalists and private equity. I have nothing against private equity or venture capitalists. I have an E1. Sure. Predatorial on one side is different, but so so is that do you think that's why what I'm seeing is a push towards private concierge medicine where people are like I'll not do I'll not pay all this money to to a to a to a healthcare provider not really a healthcare provider right as you mentioned when we first started the podcast it's it's more of an insurance company a business. And instead, I'll go directly to the practitioner, the unicorns like yourself, Dr. Osborne, who care about the patient and what they're getting and the care that they're getting. And it ends up charging, costing them less for better services. And that sounds counterproductive, like it doesn't sound intuitive to me.

It's counterintuitive.

But actually, The perfect example of that. And that's all I do now. I don't do insurance. I go directly with you and for my cardiology, and then I have a general practitioner who handles that for me, although you can do that as well, as I understand. To me, because I'm not always that, I'm not sick all the time, and even if I was, the cost to do this is ultimately cheaper.

Well, and think of this. Okay, so you have your doc you love. Yeah. If you like your doctor, you can see your doctor, right? So you love your doctor. And but remember, your doctor, more likely than not, is an employee of the hospital or employee of a big group under venture capital or equity, right? Okay. So everything that doc does is monitored for how much financial— how much he or she is going to generate financially.

They have quotas, right? Yeah. Yeah.

So, A, well, I just got to see more patients. Okay. Maybe not giving you the best, most brilliant diagnosis because I don't have time. Maybe I'm not educating you on what's going on or why you need to take this medication, blah, blah, blah.

You can't pick up the phone and have a conversation.

That's for sure. Or, you know, I do just— we decide on the right medication and the insurance company says no.

Yeah.

And then I have to spend an hour not seeing patients or taking care of you, but on the phone or on the computer.

Yeah.

Begging the insurance company to get you the drug that I know you need. And the insurance company goes, no, it's too expensive.

Yeah.

So here's what happens. You have a doc that really means well, that loves his patients, loves doing what he does, but he's in a system that locks him into horrible conflict of interest.

He or she does not have the latitude to do what they want to do.

No, and in fact, what they do, Particularly for some of these maybe very, very appropriate drugs that are more expensive, and therefore you have to go through all these barriers to try to get them for your patient.

Yeah.

In which case they try to wear the doc down.

Yeah.

Right? So the doc now is in a horribly conflicted state, because they will track how many stress tests you ordered, how many heart caths you ordered, right? They will also track What drugs you ordered? Well, did you order an expensive drug? Well, then the insurance company gives you a ding for that. Why didn't you use a cheap drug? Well, it wasn't the right drug. Yeah, but—

No, I get it. No, I know, I get it.

So your poor doc is in a horribly conflicted scenario where he wants to do the best by the patient. But if I don't order X number of stress tests and it's getting towards the end of the month, Got it. I don't get paid or I get my—

You're not the star of the day.

Or whatever. So guess what? Yeah, I think you need a stress test. Or he does a stress test and it's equivocal or negative or positive or whatever. And he goes, I think you need a heart cath.

Which is what we're going to talk about one of the future podcasts for sure.

And by the way, yeah, your blood pressure is not well controlled. Your cholesterol could be better. Yeah. But you know, it's good enough for now. Because I know I'd have to work X number of hours on the phone or on the computer, and I'd get dinged because the people that are paying me are following how many generics I write for. And if I don't write for enough generics, I get dinged.

When you say generic, generic medications versus on-brand?

Generic, generic, non-branded medications that are generally pretty inexpensive.

Got it.

Versus it may be the right drug that's not generic, and sometimes there just are no alternatives available that are not generic and inexpensive. But if I write for those, all that's tracked by the insurance company and your hospital or whoever you work for. And every time you do that, you get dinged. They say, oh, and they literally will follow, oh, 90% of prescriptions should be generic.

Well, if you're 85%, you're not going to the Bahamas next year with the company. Yeah, yeah, I get it. So, so I'm glad we had a chance to talk, Dr. Osborne. You clearly, you clearly have Very strong opinions about this, as you should. And I'm starting to form a lot of those myself, being a patient and being now the CEO of a healthcare, a real healthcare company called Clear Cardio.

That's right.

Well, thank you very much. To all our listeners out there, thank you for joining us here at Clear Cardio Podcast. With Dr. John Osborne. We'll be doing these periodically, at least once or twice a week, where we'll be talking about subjects like today, today specifically around the healthcare system and some of the challenges we're seeing in them right now, and how we can talk about working through the problems that we have to solve it together, all of us together, because ultimately we're the patients. We're the customer. And so it's up to us to dictate what we want and not the other way around. Unfortunately, it is that way now. So again, thank you, Dr. Osborne. Really great having you here. I know everybody here who's stuck with us through the podcast, who listened to all your insights in our conversation, will walk away with things to think about. And any last words you'd like to say to our folks out there?

I think the real thing is I'm going to encourage everybody Keep coming back, keep logging in, because we kind of threw a lot of bad stuff out there. Like, oh, this is terrible. What are we going to do? I don't know. It's tough, right? But I think what we're going to find and what you'll hear as we discuss this is I think we have a lot of brilliant ideas that will help to rectify a lot of the problems that we discussed.

Yeah. And if they're not, I'm sure they'll tell us.

Absolutely. Please provide feedback.

Yeah. Well, thank you guys for joining us again at Clear Cardio Podcast. Uh, with Dr. John Osborne, myself, JD Enright, the CEO of Clear Cardio. And you guys have a great day. We'll see you soon.