Martin talks with Dr. Chris Cogle, author of the recently released book Public Startup and health care policy expert, about how Medicaid agencies sit at the intersection of medicine, policy, quality, data, finance, and operations to improve care for millions while managing limited taxpayer resources.

They discuss Medicaid as an under appreciated innovation lab, what makes pilots succeed or fail, and how state–managed care organization relationships have evolved into partnerships focused on accountability, risk, and care coordination—especially in Florida’s large managed-care program.

Chris explains where value-based care works (defined populations, actionable data, simple contracts) and where it struggles (small cohorts, heavy admin burden), and how Medicaid-born models like telehealth and community-based care can diffuse into commercial and Medicare Advantage.

He also offers guidance for policymakers, agencies, and startups: treat Medicaid as a platform, invest in data, reward outcomes, create safe pilot pathways, and lean into Medicaid rather than avoiding it.

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At a very high level, the problems of the American healthcare system are:

1. The US spends a lot more money than it takes in from tax revenue, quite a bit of which is on healthcare either through government funded programs or “tax expenditures” like the tax exclusion for employer sponsored programs
2. Like most services oriented professions, healthcare is subject to Baumol’s cost disease: “There is no technological change which can make an orchestra take less time to play a symphony - service industries don’t have the same productivity improvements as manufacturing industries” yet healthcare provider salaries need to rise despite the lack of productivity gains.
3. The American public isn’t inclined to pay more taxes or reduce service consumption or pay its healthcare providers less.

CMMI which was created by the Affordable Care Act to try and engineer some other, more palatable solution to this trilemma: i.e. “test innovative payment and service delivery models to reduce program expenditures under the applicable titles while preserving or enhancing the quality of care furnished to individuals under such titles.”

It would be charitable to call its record mixed with its portfolio netting out to cost the taxpayers much more money than it has saved. A few weeks ago, former CMMI senior adviser Ankit Patel wrote an article in Out Of Pocket called How to Fix CMMI Models which I thought was very good, and I was excited to welcome him to HTN radio to talk about it.

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Tom Friedman became executive director of the North Carolina State Employee Health Plan in January 2025, covering the plan’s 775,000 active and retired members and its 55-person team managing $5.5B in spend. Friedman says the plan faced major projected deficits ($500M in 2026 and $1.4B in 2027) after years without premium or benefit changes, depleted reserves, and limited population health investment, with about 70% of members having chronic conditions.

He describes ending the Clear Pricing Project, arguing it raised costs despite showing members are highly price sensitive. The plan is boosting independent/rural primary care via networks paid ~160% of Medicare with reduced administrative burdens and shared savings, and is using Lantern to offer select elective surgeries at $0 member cost by shifting to much lower negotiated rates; 400 surgeries were completed with ~1,900 in the pipeline. Financially, projections improved toward a ~$450–$460M positive stabilization rate next year, with plans to expand “preferred provider” incentives across services.

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