This won’t shock anyone reading this blog, but nonsense is a real obstacle when you’re trying to run a common sense health plan.
One of the first things I did when we went self-funded was call our PBM and ask them to make copays for certain drugs actually reflect the clinical value of that drug — specifically the ones that prevent ER visits, hospital admissions, and general chaos. Turns out our PBM, and from what I can tell every PBM, simply isn’t built to adjust cost-sharing based on value.
So I went looking for a framework and found AHRQ — the Agency for Healthcare Research and Quality, a federal agency under HHS, same neighborhood as CMS and the FDA. Their whole job is producing research and data to improve healthcare quality and efficiency. And because they’re a government agency, you can absolutely steal their work and use it for your own benefit.
AHRQ developed something called the Prevention Quality Indicators, or PQIs — a framework that defines Ambulatory Care Sensitive Conditions, or ACSCs. The short version: these are conditions where good outpatient care actually prevents hospitalizations. Miss on someone’s diabetes medication because of a $15 copay and you’re on the hook for a $20,000 hospital admission. The math is not complicated.
Like most government work though, AHRQ handed everyone a great list and then left the room. Enter Dr. A. Mark Fendrick and Value-Based Insurance Design (V-BID).
Fendrick and Dr. Michael Chernew, both at the University of Michigan, came up with V-BID in the early 2000s. The insight was almost annoyingly obvious in hindsight: health insurance was treating every drug in a tier the same, regardless of what it actually did. A statin for a diabetic with heart disease had the same copay as a toenail fungus prescription. One prevents a hospitalization. One does not. Charging the same copay for both is insane.
They published the foundational V-BID paper in Health Affairs in 2007 and stood up the University of Michigan Center for Value-Based Insurance Design the same year. Medicare Advantage ran a formal V-BID pilot in 2017. By 2020 it expanded to all 50 states.
Twenty years later, our PBM still can’t administer benefits with this framework. And honestly, I don’t even blame them — they told me I was the only person who had ever asked. Which says everything about the state of this industry.
So AHRQ did the research. Fendrick did the framework. And apparently it falls on a tiny self-funded health plan in Tulsa to actually operationalize it. Which brings us to a product we absolutely should not have had to build — but here we are.
Meet Path.
Path is our health plan’s way of making sure cost never stands between our people and the care they need. Managing diabetes, asthma, COPD, heart failure, high blood pressure, or a handful of other chronic conditions? Path covers the expense — medications, doctor visits, lab tests. You get a preloaded card and you just use it. No forms, no reimbursement requests, no arguing with a call center. The road to care is already cleared.
Path covers the full spectrum of care for eight Ambulatory Care Sensitive Conditions. Not just the prescriptions — the office visits, the labs, the monitoring equipment that keeps people out of the hospital. If it’s directly related to managing one of these conditions, Path covers it.
| Condition | Medications | Office Visits | Labs & Diagnostics | Supplies & Equipment |
|---|---|---|---|---|
| Diabetes | Insulin, metformin, GLP-1s (Ozempic), SGLT2 inhibitors, all oral agents | Primary care, endocrinologist, urgent care | HbA1c, blood glucose labs | CGMs, test strips, lancets, insulin pumps, glucagon kits |
| Asthma | ICS inhalers, ICS/LABA combos (Advair, Symbicort), rescue inhalers, biologics (Dupixent, Xolair) | Primary care, pulmonologist, urgent care | Pulmonary function tests | Peak flow meters |
| COPD | LAMAs (Spiriva), LABAs, triple therapy (Trelegy), PDE4 inhibitors | Primary care, pulmonologist, urgent care | Spirometry, pulmonary function tests | — |
| Heart Failure | ACE inhibitors, ARBs, Entresto, beta blockers, SGLT2 inhibitors, diuretics | Primary care, cardiologist, urgent care | Echocardiograms, BNP labs, lipid panels | Blood pressure monitors |
| Hypertension | ACE inhibitors, ARBs, calcium channel blockers, beta blockers, diuretics, all combos | Primary care, cardiologist, urgent care | Blood pressure monitoring, LDL panels | Blood pressure monitors |
| Pneumonia Prevention | Pneumococcal vaccines, flu vaccines, COVID-19 vaccines, RSV vaccines, treatment antibiotics | Vaccination visits | — | — |
| Recurrent UTI | Nitrofurantoin, Bactrim, fluoroquinolones, prophylactic antibiotics, topical estrogen | Primary care, urgent care | Urine cultures | — |
| Pediatric Gastroenteritis | Ondansetron, oral rehydration solutions, probiotics (Rx), zinc | Pediatric primary care, urgent care | — | Oral rehydration supplies |
One card. Eight conditions. $0 out of pocket. That’s Path.
Here’s the part that annoys me — this isn’t complicated. AHRQ already identified the conditions. Fendrick already built the framework. The clinical evidence has been peer-reviewed and replicated for two decades. The only reason Path had to exist as a workaround is because the infrastructure that was supposed to make this easy never got built. That’s not a technology problem. That’s a priorities problem.
We’re a plan covering 85 people. If we can build Path, any self-funded plan can. And if you’re a TPA, PBM, or benefits tech company reading this and you’ve already solved this — genuinely, please reach out. I would love to be wrong about how hard this is.
And if you’re a self-funded employer who’s tried something similar, hit me up — I want to know what broke, what worked, and what you wish you’d done differently. The whole point of documenting this in public is so the next person doesn’t have to start from scratch.
