Shifting the Risk: A New Way to Account for Healthcare

"Revolutions are never won by the ruling class... if you want to fix healthcare, you have to be willing to accept a negative sum game. Someone is losing."

Why are self-funded employers still paying for healthcare on a "fee-for-service" basis, where every single transaction is billed separately with zero guarantee of a positive outcome?

My guests this week are Francois and Jeremy from XO Health, a new type of health plan built explicitly for self-funded employers. Instead of relying on traditional, opaque carrier networks (the "BUCAs"), XO Health is introducing a new accounting system for healthcare: the Care Package.

In this episode, we explore how XO packages an entire episode of care - from a knee replacement to the ongoing management of chronic diabetes or maternity - into a single, predictable, fixed price. We discuss how this model shifts financial accountability back to the provider (while also protecting them through embedded risk corridors and "mini-spec" policies), eliminates the perverse incentives of traditional networks, and ultimately allows employers to offer a health plan that employees actually want to use (complete with "hugs and kisses" for $0 out-of-pocket costs).

If you are an employer or a benefits consultant tired of 10% medical trend and unpredictable renewals, this episode provides a blueprint for how true risk-sharing can finally fix the system.

Thank you to our 2026 sponsors!

ParetoHealth: ParetoHealth empowers midsize employers with a long-term solution to reduce volatility and lower overall health benefits costs. Visit https://www.paretohealth.com/fully-insured-vs-self-funding-with-paretohealth-spencer-podcast/?utm_source=youtube&utm_medium=referral&utm_campaign=SelfFundedwSpencer to learn more.

Samaritan Fund: A program that connects those who need help to the support they need. We are proud to offer the Samaritan Fund Program. Visit SamaritanFundProgram.com to learn more.

Vālenz Health: We're Vālenz Health, your partner in improving health literacy, reducing plan spend, and delivering high-value healthcare. Visit ValenzHealth.com to learn more.

Imagine360: Imagine360 helps self-funded employers save on healthcare with smarter health plans. Cut expenses by 20-30% with custom solutions. Contact us today at Imagine360.com.

Chapters:

(00:00:00) Intro: Setting a "Circuit Breaker" for Provider Risk

(00:01:21) What is XO Health? (And where the name comes from)

(00:06:51) The Flawed "Unit of Service" Accounting System

(00:08:33) Introducing the "Care Package" (Episodic & Chronic Bundles)

(00:15:37) The Maternity Example: Guaranteed Pricing & Provider Risk

(00:20:13) How Embedded Risk Corridors ("Mini-Specs") Protect Providers

(00:27:14) Value-Based Care: What is it Really?

(00:32:32) Measuring Clinical Outcomes (Experience, Mobility, & A1C)

(00:38:07) Building a High-Performance Network & Incentivizing Steerage

(00:46:13) The Regulatory Tailwinds Pushing Employers to Act

(00:50:35) The "Negative Sum Game": Why Someone Has to Lose

(00:54:05) Closing Thoughts: Flattening Medical Trend

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