EP413: The Intersection of Healthcare Waste, Value-Based Care, and the Potential Rising Power of PCPs, With Will Shrank, MD

Estimates suggest the US healthcare system wastes upward of a trillion dollars a year, split across two broad categories: administrative failures (fraud/waste/abuse, administrative complexity, pricing failures) and clinical failures (care coordination, care delivery, and low-value care). In this episode, Stacey Richter talks with Will Shrank, MD, a venture partner at Andreessen Horowitz and former chief medical officer at Humana, CVS Health, and UPMC's health plan, about where that waste actually goes, why it's so hard to cut (someone's waste is someone else's profit), and why primary care physicians organizing and demanding better models might be an underrated lever for change. WHAT YOU'LL LEARN ✅ The six categories of healthcare waste, split between administrative failures (fraud/waste/abuse, administrative complexity, pricing failures) and clinical failures (care coordination, care delivery, and low-value care) ✅ Why cutting healthcare waste is so politically and economically difficult: nearly every dollar of waste is somebody else's revenue, which means constituencies exist to protect it ✅ Why aligning financial incentives with quality — paying for the longitudinal patient journey and for outcomes rather than volume — is Dr. Shrank's broad-stroke fix for the clinical-failures side of waste ✅ Why value-based care's slow pace of change is, per Dr. Shrank, more a reflection of how young the model still is than a sign it isn't working ✅ Why PCPs organizing and pushing back against being treated as RVU referral machines could become a meaningful source of leverage, especially if self-insured employers start demanding the same kind of value-based accountability WHY THIS MATTERS A trillion dollars of annual waste sounds like an obvious target, but as Will Shrank lays out, most of that waste is embedded in somebody's business model, which means fixing it requires realigning incentives, not just identifying the problem. Value-based care is the mechanism most likely to make that realignment happen, because it's the rare structure where reducing waste actually benefits the people positioned to reduce it. In the meantime, physicians and employers who are tired of waiting on that broader shift may have more collective leverage than they realize. MENTIONED IN THIS EPISODE EP363 with David Scheinker, PhD: Apple Podcasts | Spotify | Other Apps Books: Robert Pearl's Uncaring EP409 with Larry Bauer, MSW, MEd: Apple Podcasts | Spotify | Other Apps EP359 with Dan O'Neill: Apple Podcasts | Spotify | Other Apps Summer Shorts 2 with Scott Conard, MD: Apple Podcasts | Spotify | Other Apps === LINKS === 🔗 Show Notes with all mentioned links: Episode Page ✉️ Enjoy this podcast? Subscribe to the free weekly newsletter 🫙 Support the podcast with a small donation to the Tip Jar 🎤 Listen on Apple Podcasts 🎤 Listen on Spotify 📺 Subscribe to our YouTube channel === CONNECT WITH THE RHV TEAM === ✭ LinkedIn ✭ Threads ✭ Bluesky ✭ X 00:00 Introduction 05:56 Can we cut healthcare waste while improving patient care? 06:35 What does "healthcare waste" consist of? 06:48 What are the six categories of "healthcare waste"? 09:39 How much money does Dr. Shrank estimate is wasted each year in healthcare? 12:11 Where is that healthcare waste going, and why does it happen? 20:20 "We've built a backbone of extraordinary waste on a fee-for-service chassis." 25:04 Dr. Shrank's warning to providers out there. 30:43 Why there might be a generational shift among younger providers looking to work with different models.