Marty Makary: Groupthink is a chronic health plan condition that must be cleaned up

Egregious payment discrepancies like this drives many people to ration their medications or forgo them all together. As a physician, I see how inflated health care prices directly harm patients almost every day.

And this case is not a one off; it's emblematic of how a ruling class of health care stakeholders make billions on the backs of everyday American workers.

The smoke bomb

I recently sat down with the CEO of a mid-sized business and explained the ways in which PBMs drive up total pharmacy expenses for employers and their employees. OUr conversation inspired him to review his own PBM contract. When he first read the contract, he couldn't believe that someone would agree to such bad terms. He asked, "Who would ever sign off on this?" After a second review, the CEO realized he was the contract signatory on the group health plan's behalf. Embarrassed, he told me, "Now I see why most American businesses are getting ripped off on their health care spend."

This CEO is not a bad person; he's focused on his business operations and he is certainly not alone. Executives are used to understanding terms and contracts that are relevant to their business operations. On the contrary, PBM contracts are unnecessarily complex and opaque. Without prior clinical or health care business knowledge, it's nearly impossible to decipher the medication coverage needs, mail order requirements, exclusions, specialty drug preferences, the PBM's conflicts of interest, audit rights, and the other key information necessary to make an informed decision.

The complexity of PBM contracts makes many business leaders believe that these agreements are ultimately take it or leave it deals. The complexity acts like a smoke bomb. That's exactly why this CEO signed the PBM contract without additional research or pushback. 

At first, the CEO felt good about working with one of the three major brand-name PBMs. He found comfort being a part of the herd, but therein lies one of the biggest problems in health care: If everyone is doing something, that does not mean it's a good deal. Groupthink is powerful. Let's briefly explore its psychology.

Why we resist new ideas

Like so many others, the previously mentioned CEO was susceptible to bandwagon thinking, a phenomenon that is part of the human condition. Groupthink — a tendency to join the crowd and find comfort in following others — is part of the human condition, a topic I explore in my latest book, "Blind Spots."

Why are people so reluctant to change their beliefs? Even highly educated people who are otherwise kind and reasonable can be hostile to new ideas. The psychologist best known for answering this mystery is the late Dr. Leon Festinger.

Dr. Festinger theorized that people feel discomfort if the beliefs they hold are inconsistent with new information. When people are asked to consider a new belief or do something that counters their beliefs, they go into a state of mental conflict. He called the resulting discomfort "cognitive dissonance." To resolve this, Dr. Festinger found that people will either slightly modify their beliefs to make them fit the new information or deny the new information.

To make good decisions in life, we need to recognize that we all have biases, and then temporarily suspend those biases when considering new information. That's precisely how we develop impeccable objectivity.

It's easy to fall into the trap of "this is how it's always been done" when practicing medicine or implementing health care solutions. In fact, I've succumbed to groupthink myself at several points in my career.

A few years ago, I was confronted with a research study that showed the success of managing appendicitis without surgery (just a course of antibiotics). This had previously been heresy in the field of surgery, but the study supporting the non-operative approach was solid. Some of my colleagues pushed back on the studies despite the compelling results, but over the last decade, further research has validated this approach, despite the resistance of surgeons nationwide for years. This is the core of groupthink: People are prone to dispute ideas that go against common knowledge. 

Being open-minded

Employers aren't immune to groupthink, especially when they bear the responsibility of determining employees' benefits. However, like the alternative appendectomy treatment I confronted years ago, are employers doing a disservice to their employees by not exploring alternative proven options?

To do so, employers must first recognize that the status quo isn't always the best option. Sure, renewing with a major national carrier or PBM has worked in the past and employees don't know any better, but does this approach work best for the business? 

With health care costs predicted to jump 8% and reach record highs in 2025, I would argue that groupthink is like a chronic condition for employer-sponsored health plans. Like other unmanaged chronic conditions that may have minimal impacts in the short term but are often deadly in the long-run, employer sponsored health care groupthink is leading to significant year-over-year health care cost increases that deteriorate American businesses and diminish the financial security of millions of Americans. 

It's time for employers to overcome groupthink and break free from following the crowd. Like the aforementioned CEO, I encourage all employers (and their benefits advisors) to understand their health plan and the choices they have which can reduce costs and provide better benefits to employees:

• Unbundle benefits and try new benefits strategies: Looking at the big picture of health plan benefits can be overwhelming. But breaking it down into more digestible pieces and addressing those directly can help open your eyes to tailoring health benefits that meet the needs of employees. For example, some employers provide a hybrid option that offers both a traditional plan and high-deductible health plan so employees will have a choice that also aligns with their finances. It's OK to not fully go out of the box, but by offering additional options, employers are meeting employees' diverse health and financial needs. 
• Get a good consultant: Many health care brokers and consultants perpetuate groupthink. That's why it's critical to find a good one. Your broker should understand how these contracts work, and help you decipher what's valuable, and explore the potential tradeoffs. They should also be aware of viable alternatives and present you with all options. It's just as important to find a consultant who doesn't subscribe to the "this is how it's always been done" mindset and is willing to try something new. 
• Break free from the crowd: Partnering with the same health plans and PBMs that ultimately drive up the cost of care is a disservice to your employees.  It's OK to ask questions about costs, especially with increasing legislation cropping up every day around price transparency. 

People who are closed-minded often see themselves as being open-minded. That may have been true at Wells Fargo, a case that has highlighted a systemic problem in the benefits space. Without the knowledge of the options out there, employers are making uneducated guesses which could be doing a disservice to their employees.

Innovators consider new information objectively. They are also willing to challenge deeply held assumptions in their field. Groupthink in benefit design is one of those ideas that needs to be challenged.

Marty Makary M.D, M.P.H. is a Johns Hopkins surgeon, professor, and New York Times-bestselling author. His newest book, BLIND SPOTS: When medicine gets it wrong and what it means for our health, was released on Sept 17, 2024.