The Insurance Companies Did Not Have A Bad Year

And what they basically stated is their strategy is margin. This is, this is literally what Aetna said. We are prioritizing margins, which is profit over members. They analyzed it. They said, you know what, these 600,000 people, we don't need these. This isn't profitable for us. Screw them. So they got rid of that. So there's 600,000 people.

You didn't build your clinic to feel like an employee in your own business. I'm Matthew Colobley, and on Out of the System hosted by Dr. Talks, we chat Challenge the broken rules holding healthcare entrepreneurs back. Hear from clinic owners, rebels, and builders who are creating bold, profitable, patient-centered practices and doing it their way.

Good morning, everybody. Happy Saturday morning, or wherever you are. If you happen to be in London, it's Saturday evening, and they—I'm in California, in beautiful Los Angeles—and is just woke up about 30 minutes ago. Had a long. Long week, but a fun week. For those of you that aren't familiar, I we do a lot of what are called Dominion Path Days here with our clients, and clients come in and get their businesses reinvented because they are tired of the system. And we had a couple in this week that I think tie in beautifully to this conversation of what went out into the internet space as we were talking about the latest changes to. Specifically joint replacement. We'll talk about that. We're going to talk about the profits of the insurance companies, why you should not be fooled by their one-time charges that came out in 2025 that made them look significantly less profitable. But it was all just accounting voodoo. And we're going to talk about how do you take back control? And this is, this isn't just me flapping my gums. Please feel free to ask questions, put them into the chat. You want to have a lively back and forth, I'm all for it. I've got some coffee here. I've got my Martha's Vineyard mug, which was given to me by my longtime mentor, Rob Berkeley. And so let's dive in. Let me tell you a little bit about this week. So this week we had 3 separate orthopedic surgeons here in Los Angeles. So for those of you that aren't familiar, we do what are called Dominion Path Days, and it's one of our top levels. It's one of the ways that you can work directly with me. We have a couple different ways that people work with us. It's, this is actually probably one of our most popular because they get to spend a day with me. In a room at the Aster, my private club here in West Hollywood. Got a hotel right there. It's a beautiful location. And they go through this process and they fill out about— we wind up creating about a 120-page internal coaching document. We do a full review of their business. Doesn't matter if they're starting up. We have people that come to us that are starting up that don't have anything. They're leaving the hospital. We have people that came to us that are doing $15 million a year. So it's a wide range. And the thing that fascinated me the most about this week is that we had 3 separate orthopedic surgeons come in. Now, we had a lot of orthopedic surgeons come in this week because we have just been at a couple of orthopedic surgeon events. So, you know, here in the functional medicine space, last, you know, 3 weeks ago we had a couple of, we had a doctor in from Indiana that does, you know, just shy of $10 million a year in GP and is converting a section of his practice into cash. So again, it's, this is just Not the only people we work with, but this is who we had this week. And the most amazing thing is we had kind of a startup that's been open for about a year, right at a year, doing $1.2 million a year. We had another one that was doing about $3 million, and then we had another one that was doing about $13 million. And every single one of them, they started— now, first one still does surgery, second one doesn't, third one does surgery, has a bunch of doctors that do surgery. Every single one of them started with the whole thing of what the hell just happened with the reimbursement rates. Now, I was having a conversation with Donnie Buford, Dr. Don Buford, about a week and a half ago, and he said the orthopedic surgeons are in an uproar about the latest cuts with joint replacement. Now, if you're not an orthopedic surgeon, don't go like, oh, this doesn't relate to me. This is happening across the board. This is just indicative of what's going on. So let me just give you some, let me give you some background on this. I think this is really, really important. And then we're going to talk about the profitability of these insurance companies, which is really just It's just insane. So as you all know, obviously the big cuts don't come from the commercial insurers. What they're— we all understand that they come from CMS, right? And the commercial payers, what they do is they just follow behind, which to me is complete and utter BS, right? Because if you just stop right there, it doesn't take my, my, uh, well, I, my youngest kid's 21. So I can't, a 12-year-old can figure this out pretty easily because there's a long history of inducement of our political apparatus in the United States, be it elected or bureaucratic. So we all know what happened with the Sacklers and how they, in the pharmaceutical companies, how they would quote unquote induce members of the FDA To get approval because when they would move from government work, they would have a position waiting for them at the big pharmaceutical company with bonuses and money and all that other good stuff. And so there's a lot of different ways to be bribed. Look at how much money you're given to the PACs by the insurance companies and all this by the to the political parties. So to say that this is just coming from CMS is really BS because we know that the health insurance companies have a lot of. Have a lot of influence, undue influence. And what we also know is that the insurance companies on paper, not in the bank account, on paper, they had a statistically bad year in 2025. They had specific numbers where they, we'll talk about that, what their kind of hits were. So in the case of just joint replacement, as we know, there was an 8% net pay to joint replacement surgery just in The prior year in 2025. Okay. That beginning in 2026, that related, that was roughly about $60 to $95 less per case on a total knee. So a practice that was doing 480 joints per year, they lost $36,000 a year annually. Okay. So not only do that, does their revenue go down, They're all— everything else goes up, right? Like the cost is going to go up, their payroll is going to go up, all these things are going to go up. Okay. So if you then look at the latest changes, the proposed is now a proposed change of 19.6% for total hip and 16.6% for total knee. Stacked with all of this, this is an effectively between that and the 8%, this is an effective 25+% reduction in fees. In less than, less than a year, 25% reduction in fees. If you look at what this means, this means that someone who was the same work that you were doing is now, you're doing 480 joints in a year. This is an effective $96,000. Think about that. Think about the fact that you can be a surgeon who has done this for 35 years. And you are paid the same as somebody who comes just out of residency. It's absolutely insane to me that that is the case. It blows my mind. I know of no other industry where this is the case, where somebody who is paid the same amount, even in a law firm, if you want to work with the senior partner, it's $750 an hour. If you want to work with the junior partner who's overseen by the senior partner, it's $250 an hour. You get to make the choice. But doctors, you don't even get to set your own price based on your own experiences, which is just absolutely insane if you're in the insurance industry. Now, if you decide to be on the cash side, obviously, then you can set your own prices. But this is the fundamental thing that is the— do you have— what have doctors have done? They have given up and ceded control of their ability to price based on their value. Not based on value pricing. That's a whole other conversation. But they have given— you have given up your right to determine your worth to Washington, DC bureaucrats. Okay? And so this is, you know, this is what's— and here's what's even more disgusting. So let's continue this and then I'll open this up for any questions or any comments. Okay? So When you start to really look at all of this, okay? By the way, here's the other thing. With the 8% cut this year, the proposed 9%, let's just call it 18% cut this upcoming year in '27, the payer won't approve any of the admission or the work in the first place. The denial rates have gone up to something like 94%, just automatically because you're using AI, automatically, boom, denied, right? Which causes more work and more load for you as the doctor. So that's an additional cost. Okay. So, and if you're not, if you don't own your practice, this just causes frustration. It causes an environment. If you're working for a large group and you don't, well, I don't deal with any of that. This is causing even greater frustration. So now here's what makes it even worse. There's a big headline that came out in 2025, health insurance companies was the industry's worst year ever in over a decade, which is complete and utter total BS. It is not true in any way, shape, or form. It is an accounting voodoo. Okay? Now there, what's happened, how we know this is in the first half of 2026, in the first 2 quarters, there has been a sharp across-the-board rebound in the health insurance companies. Profits, and it did not come because all of a sudden mysteriously every single one of Americans got healthier. It came from what's known as repricing. They exit markets, and no another thing which is known as tighter utilization management. So what does all this fancy business speak mean? What it means is that every dollar of is that didn't go out the door is is profit. Okay, so when they when they have the health insurance. Right? And they take the premiums in. That dollar, the longer they can hold onto that dollar and it doesn't go out the door, that's not paid as a claim, they count it as profit. So if I take this money in and I don't have to pay it out for 2 more quarters or 2 more years, that sits in my books and I can make money on that. What's called overnight funds. Okay? The health insurance companies hold billions of dollars in cash reserves. Well, they're paid a percentage. They're paid like a half a percent or a quarter percent or something like that, or a third of a percent, whatever the number is. On what's called overnight funds. Well, that may not sound like a lot, but if you're paid, if you're being paid like 0.025% on your funds overnight and you have a billion dollars in there, whatever the number is, it could be $250,000. Well, you do that every single night. Okay. Over 30 days, it's a big chunk of money, right? This is how like Amazon makes a lot of money. Walmart makes a lot of money this way by holding the funds overnight. Same thing in the health insurance companies. So what happens is that Okay. So they have their worst year in a decade. Well, what really caused the worst year in a decade? Now, by the way, watch this because it's actually kind of manufactured and it's kind of across the board with the Big 5. Cigna in 2024 had a $2.7 billion non-cash investment loss. So what that is, is that's a loss on paper. So they go out and they've got, oh, Cigna lost $2.7 And that adjusted income from operations, that impacts— so it's a paper loss. It's not like they lost $2.7 billion in cash. It's a non-cash investment loss. They recast the value of an investment that they made and they go, oh, it's now worth $2.7 billion less than what we originally thought, which means that we can count that as a loss. But they don't lose the money. They don't write a check for $2.7 billion. Senti, which usually is not counted in the Big 5, but it lost in— had a single most important number on the page. They lost $6.7 billion on a goodwill write-down on Medicaid. Okay. Plus another $513 million tied to divesting in Magellan. This is basically an accounting admission that states that the Medicaid book that they purchased was worth far less than what they paid for it. Again, it's a write-down. It's not that they lost. Let's not sit there and say they lost $6.7 billion. Now the headline would be like, Centene loses $6.7 billion, and somewhere somebody's going, yeah, right. Good corporate money, corporate greed. That's finally— they did not write a check. Okay? This is a paper loss. This is a way to recast it so that then executives and people who are smart can come in and buy this stock because it's going to take a big hit in the stock market and then they can wait for rebound. So classic move. Okay. So what this does is this makes the overall headline for the health insurance company industry. And by the way, UnitedHealthcare in 2025, $12.1 billion net profit. Okay. Cigna, $6 billion. Elevance Health, $5.7 billion. CVS lost $1.8 billion, one-time charge. Humana, $1.2 billion. Okay. These are all one-time charges. Now here's what happens. Check this out. The share of the premium dollars that the health When I say premium dollars, the health insurance premium dollars paid out in medical claims. Okay. If what happened is they were paying out more claims towards the end of 2025 across the board, CVS, Elevance, Humana, UnitedHealth, they were all paying in the low 90s as a percentage of share of premium dollars paid out in medical claims. What they target is anything in the low Okay. So what's happened is that at Q4 of 2025, they were paying out more in claims. Guess what happened in 2026? The first 2 quarters, they went from paying out in the low 90s, on average, 93% of their premium dollars were paid out in medical claims. That was at the end of 2025. In the first 2 quarters of '26, they're paying out somewhere in the neighborhood of 87% as an industry. That means that they went from paying 93%, so it's a 6% change, which dramatically positively impacts to the tune of billions of dollars in profits for health insurance companies. So what does that mean? How do they do this? Okay. How they do this very simply, actually the consensus for the industry in the first 2 quarters, let me update my numbers, were 85.5%. Okay. It's an enormous number. Every major payer except for Humana has raised their full-year profit guidance. Okay? And what that means is they're telling Wall Street, we're expecting this trend to continue. We're going to be very profitable. Buy our stock. Okay? So what drove the recovery? Let's take a look at this. First and foremost, they all repriced their premiums. In 2026, premiums were set. Okay? And so what they did is they charged more. They went through and did what's called a benefit redesign, which means that there's higher deductibles, narrower networks, and more cost is shifted to the member and more burden is shifted to the medical industry, meaning specifically the doctors who own the practices and/or the hospital groups. Okay. They left unprofitable products. So Aetna, for example, left the Affordable Care Act exchange and shed 6 600,000 members. And what they basically stated is their strategy is margin. This is literally what Aetna said. We are prioritizing margins, which is profit over members. They analyzed it. They said, you know what, these 600,000 people, we don't need these. This isn't profitable for us. Screw them. So they got rid of that. So there's 600,000 people, which now that there's not somebody else in that marketplace, that means that somebody else comes along and swoops them up and says, hey, yeah, sorry, there's no other options, but we're going to charge you 25% more. So now their health claim, their health insurance has gone up. That group's health insurance has gone up. And then on top of it, they probably have a reduction in coverage and they probably have a delay in claims being paid. Okay. So if you run the numbers on this, one last thing, tighter utilization management, which means more prior authorization, more denials, more downcoding. And what this means is they're using AI, 94% of all claims are denied. It used to take 7 days. I don't— don't quote me on this, but it used to— I know it used to take on average 7 days to hear back. Now it's taking somewhere in the neighborhood of 7 hours or 7 minutes. And so they're denying claims, 94% of claims are denied on the first go-round. Okay. That's what tighter utilization management means. More prior authorization, more denials, more downcoding. Or downcoding is, well, it's not this code, it's going to be this code. So we're going to pay you less. So you have no— you have— here's the thing. You have no control. You as the doctor, you don't have control. The patient doesn't have control. The control is all with the health insurance companies. Your big group that you work with, they think they have control. They think they have power to be able to negotiate this. Not really. It's where else are they going to go? You see, the health insurance companies own the market. They own the patient. They own the customer. Okay? In my world, when I first was coming up and I was starting to do events, events, if you could put people in a room, that's where all the money was, right? And so it's the same thing. We used to say whoever owns the list, whoever controls the list wins. Well, the health insurance companies control the list. And they think and they believe that you will not under any circumstances leave them because they have your customer, that you're not going to be able to figure out how to get your customer. They haven't met me. Okay, this is what this is about. You see what we do at Mavericks. It's all about you having control. Now that may seem scary. I understand that, but it doesn't have to be. I mean, you made it through med school for God's sakes. Okay, so let's keep running these numbers. Just run the arithmetic on this tighter utilization management. Let's continue down this path. Let's just show you what happens when there's small percentages, the power of small numbers. UnitedHealthcare, One of the 10 largest corporations in America by market cap, in the same market, in the same breath as Walmart, Nvidia, Meta, Tesla, all of these, right? They're in that same group. What they did is they reduced by 2.7% their— I want to get this right. Let me get this right number for you. Okay. They dropped this number, this utilization. So when I was talking about the, you know, how like they want that number in the low 80s, in the mid-80s, that percentage of the MLR number. So they dropped their number, that number in tighter utilization management. They dropped that number 2.7 points year over year on $112 billion of quarterly revenue, not the year, $112 billion of quarterly revenue. What that means is that's an additional $3 billion in profit in a single quarter. That's $3 billion that would've gone out to claim, to pay claims under last, under ratio, under last year's ratios that didn't. So what they did is they, they tightened their utilization management. They went from 93.7% of every dollar being paid out to dropping it to like 89% or something like that. I think it's a little bit higher than that. And on $112 billion of quarterly revenue, what that meant is that UnitedHealthcare dropped an additional $3 billion with a D, $3 billion in a single quarter in profits. Now, how is that good for America? How in the world is that a good thing for America? We spend 3, almost 3x more than the next country in the world on our healthcare. And we have the 50th worst results. We have some of the highest cases of type 2 diabetes, of high blood pressure, of high cholesterol. We're some of the largest users of anti-anxiety medications that don't work, by the way. They just mask it. We have some of the largest chronic health diseases in the world. And they, We have the highest suicide rate for doctors in the world. You are almost 3x more than any other professional industry in the United States, more than lawyers, more than CPAs, blah, blah, dentists, the whole thing. And they made an additional— this is just, by the way, this is just UnitedHealthcare. This doesn't factor in Blue Cross Blue Shield, Aetna, Cigna, none of them. Okay? An additional $3 billion in quarterly profits. That were not paid to you. Now, I don't know about you, but you probably didn't get invited over to that health insurance company's executive's new vacation home out in the Hamptons, because I didn't get my invite. So when you really start to look at this and you look at what they've done in that same 12 months, what they're also going to do, you're you, if you're an orthopedic surgeon, and I'm just using orthopedic surgeons, even if you're not one of them. The doctor's absorbing an 8% Medicare cut fee and then absorbing another 20% cut. And the 5 companies who stand between the doctor and the patient posted the sharpest profit recovery in years. And they told investors that it came from pricing discipline and better utilization management, meaning screwing the patient and screwing the doctor. This is absolutely disgusting. And let me tell you why this drives me though. When I tell you that we're going to lead the exodus of 100,000 doctors out of insurance-based care by the end of 2040, and I'm very open about this strategy in the world of business, when you go to business school, And I don't have a, I didn't go to get my master's in business. Okay. And when I talk about business school, I'm talking about, yeah, I have my undergraduate in marketing and business, but I'm talking about the business school of day-to-day making payroll, growing a company, finding funds to grow a company. I've been an entrepreneur for 25 years and I've worked in corporate America. But the thing that here's, so when you, you have to look at, you have to look at strategy. Right? When it comes to how you, you have to kind of look at, there's a basic concept of called supply and demand. Okay? And the best way I can explain it is I had a college professor explain this to me. He goes, okay. He said, it's 12 o'clock in the afternoon. And he said, you're hungry and you want a pizza. How much are you willing to pay for a pizza? And, you know, whatever, back then, $3, $4, this is the '80s. And he said, okay, it's 2 o'clock in the morning. There's one pizza place open. And he said, you're really high and you've got the munchies. How much you willing to pay for a pizza? $20. He goes, well, that's supply and demand. And that always stuck with me. Okay. This was the '80s. He was talking about being high. So in, in school. So I want you to think about it like this. Right now there is, and there is an open funnel. To private equity and the current corporate medical structure of a system, of a train that is delivering doctors who are trained. Now, if you think about this, if I am working at Goldman Sachs and I need to hire kids coming out of college, Wharton School of Business, so they're 26, 27 years old, They are coming in sort of trained, but they haven't really laid hands on stuff. In the case of somebody coming out of medical school, residency, and then a fellowship, well, you've actually physically, let's just use surgery as an example. You've actually physically been doing surgery. You've been doing it for a while, right? You've been working in the ER. You've been, you know, working in emergency surgery or doing orthopedic surgery, whatever it is. Okay. Or you've been delivering babies, or you've been a urologist. Okay? You've got hands-on training and you paid, like they paid you, but they paid you a nominal fee for that. So think about it. You're coming out and you've invested half a million dollars. You're carrying $250,000 worth of debt, $350,000 worth of debt that you paid for your training, that you're coming out and you're completely trained. Great. Great. You still got a lot to learn. Okay? And so the big corporations are like, this is great. These people are trained. I don't have to invest that much money in training them. And then, so what do we do? My mission is really simple. They have a steady flow every year of doctors coming out ready to work. What if we cut off the flow? What if we created an environment that doctors were leaving the abusive healthcare system, opening their own practices, going to cash, saving patients money, getting better patient outcomes, and then we were able to get doctors as they were coming out of residency that they didn't go into the mechanized, the industrialized medical industrial complex. And they went in out on their own, like a Dr. Eisenberg has done. Okay, now we're hitting it from both places. Their supply chain is disappearing. That's where we start to get real impact. That's where we start to get a seat at the table. And I'm very open about it, folks. I do not hide the strategy at all because I know When I look at these numbers, the health insurance companies are raping us. They are absolutely raping us. They control the entire system. They control the pharmaceutical industry through their pricing. They control, they control Washington. They control, they control the entire system. They control the hospital groups. They control the practices. They control the venture capitalists. They control the whole thing. They have a war chest that is massive. So that's the question, right? So I'm going to open this up for questions or comments about this. Feel free. That monologue went longer than I thought. And happy Saturday morning. No, I'm not in Martha's Vineyard. I'm in LA, if you came in late. So who has a comment or question on that? Put it into the chat. Okay. Or if you want to raise your hand, you do not have to turn on your camera if you don't want to. It is not a requirement. Okay. But feel free to go ahead and put a question or a comment to what I just shared in the chat. And if you don't know what to say, how does that make you feel? Piss you off? Anger you? Do you feel like you've been conned? This is pissing you off so much. Just in the chat, this is pissing you off so much and you want to talk to Christine on her team about how you can get out and you want to take a look at ways that you can get out of the industrialized complex, start your own practice, do your own thing, grow your existing thing. I put a link in there, mavericksprofitsystem.com/schedule. You can check it out and book a call with Christine. Let's go back to this. So let me take up a couple of other things that have come up here. So let's go back to where I started this morning. Let's talk about the, the people that we're in. So like I said, 3 different orthopedic surgeons. One was a startup, one was an ex— Mark Eisenberg that we had. Another client who was in, who's been straight cash and doing about $3 million. Then we had A doctor who does about $13 million in Florida doing orthopedics and is adding cash in. Here's the fascinating thing. Each doctor that is on a staff, meaning let's say you're part of a large group, we're getting more and more larger groups that are contacting us saying, hey, we need to add in cash-based services. We have a couple of our doctors that want to do it. And the thing is, Is that they realize that each individual doctor, if they're generating $3 million a year in fees in the cash side and they're seeing whatever, 40 patients in a day, they're starting to realize that they could generate the same $3 million on 40 patients in a month. Now, if I am a business owner, you have to understand the higher volume I have, the more wear and tear in the facility, the bigger facility I need, the more systems, the more tools, the more computers, the more staff, the more I have to pay in payroll tax, health insurance, all of this. But if I can increase my profitability and I can reduce my structure load, it's a smart thing to do. Now that does, so then that comes up with the question, well, what about the patients that can't afford it? What about the patients that can't afford cash-based services? I'm very open about this. And I, you know, when you have patients that, and you have great profit margins and you have patients that are paying cash, And the way we teach you how to structure your payments so that you're highly profitable, you can take a portion of that to take care of people who can't afford the procedures. Now, it's not like we're charging $25,000 for a single PRP injection. That's, that's not what I'm saying. Clients are paying $2,000, charging $2,000, $2,500. If they're packaging things together, it's $3,500 to $5,000, somewhere in the neighborhood. But it's highly profitable. There's margin. Margin is profit. And so then what they're doing very simply is they are taking a portion of that and they are helping those who are less fortunate. Kind of to me how society should work. Okay. I'm not necessarily about let's tax the billionaires and the rich and take all their money. That's not what I'm saying. It's an altruistic way of how I look at it. And so there's, you know, over and over and over again, there is this Ongoing transformation happening in the medical industry. Doctors are waking up. I wish you could have been with me this week. I wish you could have seen the doctors and how pissed they were. Not like angry beating a wall, but they were pissed off when they— about this reimbursement rate. So, all right. That is what I have this morning. Let me see here. Do you have any questions for me? You got me. Ask me a question. Ask me a marketing question. Ask me how to grow your practice. Ask me a mindset question. What is it that I can help you with this morning? You got me. Okay. Are you free to raise your hand? If we don't have anything else, I'm going to let you go this morning. Take advantage of that. Go to mavericksprofitsystem.com/schedule. Check it out. Take advantage of this or get a copy of my book out of the system. You can go to mavericksprofitsystem.com/book. the book or check out my podcast, Out of the System. It's on Spotify, iTunes, everywhere you can listen. That's it. That's what I got for you this morning. Happy Saturday. I hope this doesn't depress you. I hope this motivates you. And I look forward to seeing you at a conference in the future or come over, shake our hand. And thanks for joining me this morning. Take care, everybody.

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