Pharmacy costs now represent 35 to 50% of total healthcare spend for many employers. Yet, most plan sponsors are still operating inside a black box they can't see into, let alone control.

In this episode, Jake Frenz, Founder and CEO of SmithRx, breaks down how the traditional pharmacy benefit manager model became one of the most opaque and conflicted structures in all of healthcare, and what employers can actually do about it. A Marine Corps veteran turned serial healthcare entrepreneur, Jake helped build Collective Health from the ground up before launching SmithRx a decade ago, now serving 1.5 million members across 5,000 self-insured companies.

-------

“ When you think about that $350,000 rebate check coming back to pay for the programs, think about what's going out the door. Think about from a finance standpoint, what the cash out is that you have to true up with that rebate. You're paying a bolus, you're paying an increased amount upfront to get a rebate in arrears. There's a time, value, money, and overall concern there. I think that it's an easy argument to have, or discussion really, with the CFO around move to a transparent model, try to pull back, preference biosimilars or other low net cost options. And rebates, at the end of the day, today are real. Should rebates exist in this ecosystem? Probably not. I don't think they should. But that is a matter of fact today, and you have to meet the market where it's at. Those rebates will continue even under a transparent pass-through model. They just may be less, and that's okay because you're going to look at that per member, per month, true net cost, what your cash out is going to be, and that is a very easy, simple story to tell.” – Jake Frenz

-------

Episode Timestamps:

*(01:24): Jake Frenz's background: from Marine Corps to PBM founder

*(03:00): A brief history of pharmacy benefit managers and how we got here

*(10:14): Jake's journey from Anthem and Collective Health to founding SmithRx

*(18:27): What transparency actually means and why it equals control

*(20:33): The questions every plan sponsor should be asking their PBM

*(40:37): AI in pharmacy benefits: where it helps and where accuracy is non-negotiable

-------

Links:

Connect with Jake Frenz on LinkedIn

Connect with Dane Thorwaldson on LinkedIn

Learn more about Collective Health

Learn more about Caspian Studios

-------

If you’re enjoying The Benefits Playbook, we’d love your support. Take a moment to rate and review the show wherever you’re listening — it really helps others discover us and join the conversation on the future of employee benefits. And while you’re there, don’t forget to hit subscribe so you never miss an episode. If you know a colleague or friend who’d enjoy the conversation, share it with them too. Thanks so much for listening, and we’ll see you next time.

-------

The views expressed in this podcast are those of the speakers and do not necessarily reflect the views or positions of Collective Health, its affiliates, sponsors, employees, or customers. This podcast is not intended as legal, medical, or financial advice. If you have any questions or concerns in these areas, please consult with a qualified professional.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Many employers treat high-cost healthcare claims as bad luck — something to absorb and move on from. But ignoring the details buried in those claims is costing companies millions, and the data to fight back already exists.

In this episode, Dr. Christine Hale, Chief Medical Officer, US Benefits at Gallagher, brings a rare perspective to employee benefits: she's been a physician, a McKinsey strategy consultant, and a patient navigating a complex, misdiagnosed illness for over a year. That experience shaped everything about how she thinks about healthcare and why getting the right diagnosis is the single most important thing a plan can do for a member.

-------

“ When I was in medical school, cancer was basically a binary disease. You either got better or you passed away, and that was the sad truth. We can now keep patients alive for over a decade on suppressive therapy, treating cancer like a chronic condition, living very happy, productive, fulfilling lives. That's incredible. However, insurance was not really set up for ongoing risk. It was set up for unknown risk and to spread that unknown risk. That's where I see a lot of organizations getting into trouble is they say, Well, I bought stop-loss. Well, if you have someone on an $800,000 a year regimen and they're going to be on it forever, the stop-loss coverage is going to run out after a few years. They're going to say, That's known risk and our business model doesn't support that. That's been the real challenge, is trying to figure out how to balance strategies that help you mitigate the lightning strike shock and awe claims, coupling it with, Wow, the water level is really rising on these ongoing claims and how expensive those are getting, and that requires a different way of thinking.” – Dr. Christine Hale

-------

Episode Timestamps:

*(00:37): Dr. Hale's serpentine career path

*(05:01): Redefining high-cost claimants: Lightning strikes vs. the rising tide

*(12:06): The right diagnoses: Why getting it wrong costs members and plans millions

*(18:35): Gallagher's Complex Case Navigation Program “Stella”

*(33:54): The $250K knee replacement: A case study in hidden billing fraud

*(40:50): The future of benefits

-------

Links:

Connect with Dr. Christine Hale on LinkedIn

Connect with Kirk McConnell on LinkedIn

Learn more about Collective Health

Learn more about Caspian Studios

-------

If you’re enjoying The Benefits Playbook, we’d love your support. Take a moment to rate and review the show wherever you’re listening — it really helps others discover us and join the conversation on the future of employee benefits. And while you’re there, don’t forget to hit subscribe so you never miss an episode. If you know a colleague or friend who’d enjoy the conversation, share it with them too. Thanks so much for listening, and we’ll see you next time.

-------

The views expressed in this podcast are those of the speakers and do not necessarily reflect the views or positions of Collective Health, its affiliates, sponsors, employees, or customers. This podcast is not intended as legal, medical, or financial advice. If you have any questions or concerns in these areas, please consult with a qualified professional.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Doctors aren't "resistant to AI" because they're technophobes. They're navigating a fundamental shift in what it means to practice medicine when patients arrive having already diagnosed themselves via ChatGPT. The path forward isn't "adopt more AI tools." It's building a new operating model for clinical practice that balances ambient documentation, patient empowerment, and the irreplaceable human elements of care.

In this episode, Dr. Spencer Dorn breaks down how AI is reshaping medicine: from eliminating "pajama time" for some clinicians to democratizing medical knowledge in ways that fray the profession's grand bargain with society. He explores why trust remains the currency that matters most, and what it means to be a physician when AI tools change faster than the relationships they're meant to serve.

For benefits leaders and consultants, the implications are just as significant. As members increasingly turn to AI before ever engaging the healthcare system, employers have a real opportunity — and responsibility — to help them navigate that information and make better care decisions. Understanding how AI is reshaping clinical practice isn't just a healthcare story. It's a cost, strategy, and member experience story too.

-------

“ The question that really motivates me most right now is what does it mean to be a physician in this new world? And even more so, what does it mean to be a human being as things are changing so quickly?  How do we keep our eyes open and make the best decisions that we can so that we don't go down the wrong paths, which inevitably we will, but hopefully we'll have the awareness to recognize we're going down the wrong path so we don't keep going and we'll have the agency and autonomy to shift gears.” – Dr. Spencer Dorn

-------

Episode Timestamps:

*(01:01): Dr. Spencer Dorn's journey from gastroenterology to clinical informatics

*(04:31): The hidden work of medicine before, during, and after patient visits

*(06:54): How AI is transforming clinical workflows

*(12:12): The democratization of medical knowledge

*(15:47): AI-first care and the healthcare math problem

*(25:00): What it means to be a physician in an AI-powered world

-------

Links:

Connect with Dr. Spencer Dorn on LinkedIn

Connect with Kirk McConnell on LinkedIn

Learn more about Collective Health

Learn more about Caspian Studios

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.