Featuring Bryan Khoo, Stanford graduate and incoming medical student
By Dr. Matthew Sloan | The Joint Replacement Podcast | Episode 58
Why does healthcare in the United States keep getting more expensive while patients struggle to access treatment and physicians face declining reimbursement?
For patients preparing for hip or knee replacement, insurance coverage can be one of the most confusing and frustrating parts of the process. Even when a physician recommends surgery, an insurance company may require additional documentation, delay authorization, or deny payment.
But what if some of these administrative obstacles aren’t simply unintended consequences of a complicated healthcare system? What if financial incentives contribute to the barriers patients and physicians experience?
In Episode 58 of The Joint Replacement Podcast, I sat down with Bryan Khoo, a Stanford graduate in management science and engineering and incoming medical student at Washington University. Bryan has gained attention for his investigations into health insurance practices, Medicare Advantage, prior authorization, and healthcare economics. His work on LinkedIn has even attracted responses from entrepreneur Mark Cuban.
Our conversation explores where healthcare dollars go, the growing influence of insurance companies, and how financial incentives may affect decisions about patient care.
Editorial note: Some of the research findings, numerical estimates, and allegations discussed in this episode have not been independently verified by Dr. Sloan or The Joint Replacement Podcast. Specific insurance company and healthcare business names have been redacted from portions of the interview. The guest’s interpretations are presented as his own, not as independently established findings of wrongdoing.
Why Does American Healthcare Cost So Much?
American patients are experiencing rising insurance premiums, deductibles, and out-of-pocket healthcare expenses.
Meanwhile, physicians have experienced substantial reductions in Medicare reimbursement when adjusted for inflation.
This creates an important question: If patients are paying more and physicians are receiving less, where is the additional money going?
Bryan argues that an increasingly complex administrative system, combined with consolidation among insurers, hospitals, and other healthcare organizations, may be contributing to rising costs.
One particular area of concern is vertical integration.
What Is Vertical Integration in Healthcare?
Vertical integration occurs when a corporation controls multiple parts of the healthcare delivery system.
For example, a parent corporation might own:
- A health insurance company
- Physician practices
- Surgery centers
- Pharmacy businesses
- Other healthcare service providers
In theory, integrating these services could improve efficiency, reduce administrative duplication, and coordinate patient care.
However, Bryan raises concerns about whether these arrangements can also create financial incentives that increase healthcare spending without necessarily improving patient outcomes.
When an insurance organization owns both the entity paying for care and the organization delivering it, questions arise about how services are priced, how patients are directed to affiliated providers, and whether the financial relationships are sufficiently transparent.
These concerns do not mean all vertically integrated systems behave improperly. They do illustrate why transparency and independent evaluation of healthcare costs are essential.
Who Gets Paid When You Have a Hip or Knee Replacement?
As an orthopedic surgeon, this is one of the most important questions I encounter when discussing healthcare economics.
Patients frequently assume their surgeon receives a large portion of the total amount billed for a joint replacement.
In reality, the professional fee paid to a surgeon is only one component of the overall expense.
The total payment for joint replacement care can include hospital or surgery center services, operating room resources, implants, anesthesia, nursing, medications, and other services.
Medicare’s professional payment to the surgeon also generally includes postoperative physician services provided during the 90-day global surgical period.
In our conversation, Bryan and I discuss the substantial difference between physician reimbursement and the total facility-associated cost of joint replacement.
Understanding this distinction matters when evaluating claims about why surgery is expensive.
A high total hospital payment does not mean the surgeon personally receives that amount. Likewise, facility payments support multiple clinical resources and operational expenses rather than representing pure profit.
An important policy question is whether current reimbursement structures appropriately support the physicians and clinical teams delivering care while preserving affordable access for patients.
What Is Prior Authorization, and Why Can Your Insurance Company Deny Surgery?
Prior authorization is a process through which an insurance company reviews a proposed medical service before it is performed.
For orthopedic surgery, insurers may require documentation demonstrating that a procedure meets their medical necessity criteria.
For example, a patient considering knee replacement may need documentation of:
- Symptoms and functional limitations
- Imaging findings demonstrating arthritis
- Previous nonsurgical treatments
- The impact of arthritis on daily activities
- The surgeon’s recommendation and rationale
While prior authorization is intended to help prevent unnecessary care, it can also create administrative barriers.
One central concern Bryan raises is that medical necessity criteria may vary considerably between insurance companies.
A patient who meets the requirements of one insurer might encounter different documentation requirements with another insurer, even when the underlying clinical condition is similar.
Bryan describes what he calls a documentation trap: situations in which a patient’s condition may justify treatment, but the clinical notes submitted for authorization do not address every requirement in an insurer’s policy.
The result can be delays, appeals, additional paperwork, and substantial administrative work for the treating physician.
Why Don’t Physicians Appeal Every Denial?
Appealing a denied authorization can require significant staff and physician time.
A physician may need to review the medical record, prepare additional documentation, submit a formal appeal, or participate in a peer-to-peer discussion.
Bryan argues that these administrative costs can discourage physicians from pursuing some appeals, particularly when offices are already operating with limited resources.
He discusses research suggesting that many authorization denials are not appealed, although the exact rates and applicability of those findings require independent confirmation.
For patients, the broader issue is clear: delays in insurance authorization can interfere with timely access to medical treatment.
Your Surgery Was Approved. Can Insurance Still Refuse to Pay?
One of the most surprising topics in our conversation was post-service denials.
Prior authorization does not necessarily guarantee that an insurance company will ultimately pay a claim.
An insurer may authorize a procedure before surgery but later review the submitted claim and deny payment because of coverage, coding, contractual, or other requirements.
This distinction is frequently misunderstood.
What Is a Post-Service Denial?
Consider a patient scheduled for total hip replacement.
The surgeon submits the necessary documentation, the insurer issues prior authorization, and the surgery proceeds.
Following the procedure, the hospital and physicians submit claims for reimbursement.
An insurer may then deny a claim during post-service review.
The reasons can vary, and whether the denial is permissible depends on the specific insurance contract, applicable laws, and circumstances.
Bryan argues that post-service denials can create significant financial and administrative burdens for physicians because the treatment has already been delivered.
The surgeon and clinical team cannot reverse the time, resources, or professional work already invested.
Practices may then spend additional time seeking reconsideration or appealing the payment decision.
Does the Patient Have to Pay?
Not necessarily.
Financial responsibility following a denied claim depends on factors such as the patient’s insurance policy, provider network status, contractual protections, and the reason for the denial.
Some denials may become disputes between insurers and healthcare providers rather than bills that can legally be passed on to patients.
Patients should not automatically assume they are responsible for a denied claim without reviewing their explanation of benefits and contacting their insurer and healthcare provider.
For patients preparing for surgery: Confirm your coverage, network status, prior authorization requirements, and expected financial responsibility before the procedure whenever possible.
Is Medicare Advantage Really an Advantage for Patients?
Medicare Advantage is another major focus of this episode.
Traditional Medicare is administered through the federal Medicare program, whereas Medicare Advantage coverage is provided through private insurance companies approved by Medicare.
Medicare Advantage plans may offer benefits that traditional Medicare does not routinely include, such as certain dental, vision, hearing, or prescription drug coverage arrangements.
However, Medicare Advantage plans can also have provider networks, referral requirements, and prior authorization policies that differ from traditional Medicare.
Bryan is particularly critical of Medicare Advantage and raises questions about its financial incentives, authorization requirements, and the relationship between government payments and patient access to care.
His criticism is strongly expressed during our discussion. However, it is important to distinguish concerns about program design, documented payment problems, and allegations of fraud or intentional misconduct. These are not interchangeable.
What Should Joint Replacement Patients Know?
If you are considering hip or knee replacement, it is important to understand your specific Medicare coverage.
Questions to ask include:
- Is my orthopedic surgeon in my plan’s network?
- Is the hospital or outpatient surgery center covered?
- Do I need prior authorization for surgery?
- Will postoperative physical therapy be covered?
- What happens if I need inpatient rehabilitation?
- What are my expected out-of-pocket expenses?
Medicare Advantage may be a reasonable choice for some beneficiaries, but its suitability depends on the individual’s healthcare needs, local provider network, financial circumstances, and plan details.
Patients should compare plans carefully rather than assuming that either Medicare Advantage or traditional Medicare is universally better.
Are Insurance Companies Using Artificial Intelligence to Deny Care?
Artificial intelligence is increasingly being incorporated into healthcare administration, including document review, claims processing, and utilization management.
In our conversation, Bryan expresses concern that automated systems could accelerate insurance denials or increase administrative burdens for physicians.
The potential benefits of AI should also be acknowledged.
Properly designed systems might reduce paperwork, improve processing speed, and help identify missing documentation before an authorization request is submitted.
The critical question is how these technologies are implemented.
If automated tools are used to support clinically appropriate decisions, they could improve efficiency.
If they are used without adequate clinical oversight, transparency, or meaningful appeal mechanisms, they could create additional barriers for patients.
Medical decisions should remain clinically accountable, with transparent processes for reviewing and correcting errors.
Are Independent Physician Practices Being Pushed Out of Healthcare?
Independent medical practices face growing financial pressures.
These include staffing costs, technology expenses, malpractice coverage, regulatory requirements, declining inflation-adjusted reimbursement, and administrative demands from insurance companies.
Bryan argues that these pressures may encourage consolidation as physicians increasingly join large healthcare organizations.
As an independent orthopedic surgeon, I believe preserving a diverse healthcare system that includes both independent practices and large institutions is important for patient access and choice.
Independent practices may offer flexibility and rapid decision-making, while larger healthcare systems can provide specialized resources, integrated services, and infrastructure.
Neither model automatically guarantees better or more affordable care.
The important question is whether our healthcare payment and regulatory structures preserve competition, maintain quality, and allow patients meaningful choices about their physicians.
What Can Patients Do When Insurance Denies Care?
Insurance denials are frustrating, but patients may have several options depending on their plan and the circumstances.
1. Request the specific reason for denial.
Ask your insurer for the written explanation and the medical necessity or coverage criteria used to make the decision.
2. Work with your treating physician.
Sometimes additional clinical documentation can clarify why treatment is appropriate.
3. Understand your appeal rights.
Many insurance plans provide internal appeal procedures, and certain denials may qualify for external review.
4. Keep copies of communications.
Maintain records of authorization numbers, denial notices, appeal submissions, and conversations with insurance representatives.
5. Seek assistance when necessary.
Your healthcare team, insurance benefits representative, state insurance department, or an appropriate patient advocacy resource may be able to help clarify the process.
A denial does not always mean that a recommended treatment is inappropriate or that further review is impossible.
Can the American Healthcare System Be Fixed?
Near the end of our conversation, I asked Bryan what three changes he would make to improve American healthcare.
His priorities centered on reforming Medicare Advantage, creating stronger accountability for potentially inappropriate insurance denials, and developing more consistent medical necessity standards.
He also advocates for greater transparency so physicians better understand the documentation required for approval.
One of his emerging projects involves helping medical practices compare their clinical documentation with insurance requirements before submitting claims or authorization requests.
The goal is to reduce preventable administrative denials without changing the underlying clinical decision.
While technology and administrative reform cannot solve every problem in healthcare, making coverage requirements more transparent may be a practical starting point.
Why Mark Cuban Is Part of This Conversation
Bryan’s healthcare economics posts have received attention from Mark Cuban, the entrepreneur behind Cost Plus Drugs.
Cuban has publicly questioned aspects of traditional healthcare pricing, prescription drug costs, and employer health benefit arrangements.
During the episode, Bryan discusses the importance of employers understanding the actual cost of their healthcare plans.
He questions whether commonly advertised network savings always reflect meaningful reductions in healthcare spending.
This raises an issue that extends far beyond orthopedic surgery.
Employers, patients, physicians, and taxpayers all contribute financially to the healthcare system.
Understanding where those dollars go is essential to determining whether the system is delivering appropriate value.
Final Thoughts: Healthcare Should Be About Patient Care
As physicians, our responsibility is to recommend treatment based on a patient’s clinical needs, available evidence, and individual goals.
Insurance companies have a legitimate role in administering benefits, evaluating coverage, and helping control unnecessary spending.
But those processes should be transparent, consistent, clinically appropriate, and subject to meaningful review.
Our discussion with Bryan Khoo raises important questions about whether current financial and administrative incentives always support those goals.
Not every claim discussed in this episode has been independently established, and reasonable disagreement exists about the causes of rising healthcare costs and the best reforms.
Nevertheless, understanding the relationship between insurance coverage, healthcare reimbursement, and access to treatment is increasingly important for both patients and physicians.
For those considering hip or knee replacement, learning how your insurance works is an important part of preparing for surgery.
And for everyone involved in healthcare, perhaps the most important question remains:
Who should ultimately determine the medical care a patient receives?
Watch or Listen to Episode 58
Are Health Insurance Companies Profiting by Denying Your Care? | Bryan Khoo
Join Dr. Matthew Sloan and Bryan Khoo for a discussion of prior authorization, Medicare Advantage, healthcare consolidation, physician reimbursement, and potential reforms to the American healthcare system.
Watch on The Joint Replacement Podcast YouTube channel or listen on Spotify and Apple Podcasts.
Connect with Bryan Khoo on LinkedIn.
For additional discussions about hip and knee replacement, healthcare policy, and orthopedic innovation, visit The Joint Replacement Podcast.
Editorial Disclosure: Portions of this interview have been edited to remove specific insurance company and healthcare business names because the underlying studies, statistics, and allegations were not independently verified by Dr. Matthew Sloan or The Joint Replacement Podcast. The opinions and interpretations expressed by the guest are his own. This content is educational and is not intended to establish misconduct by any particular organization.
Further Reading and Resources
- Centers for Medicare & Medicaid Services: Prior Authorization
- Medicare.gov: Medicare Advantage Plans
- Medicare.gov: How to File an Appeal
- KFF: Medicare Advantage Research
- American Medical Association: Prior Authorization
These resources provide general background and patient guidance. They do not independently substantiate every numerical claim or allegation discussed in the interview.