Paul Markovich Outlines Four Strategic Reforms to Curb Rising U.S. Healthcare Costs

United States healthcare expenditures are currently outpacing inflation, with spending levels far exceeding those of other developed nations. Paul Markovich, president and CEO of Ascendiun—the nonprofit parent organization of Blue Shield of California, Blue Shield Promise Health Plan, Altais, and Stellarus—warns that the current trajectory is unsustainable.

During a recent interview at the AHIP 2026 conference, Markovich asserted that the healthcare system is effectively failing the public and requires systemic reform that cannot originate from within the industry itself. To address this, Markovich launched Worthy, a national policy reform movement dedicated to establishing pragmatic, nonpartisan solutions. He highlighted four primary policy objectives driving the initiative:

1. Universal Digital Health Records: Markovich advocates for the implementation of comprehensive, real-time digital health records for every American to enable truly personalized care. He estimates that eliminating the industry’s reliance on outdated technology and fax machines could save over $300 billion in administrative costs. While he notes that the technical implementation is straightforward and compliant with current privacy laws, he suggests that the primary barriers are the financial and business interests of entities that benefit from fragmented information.

2. Transitioning to Value-Based Care: Markovich proposes a shift from the traditional fee-for-service model toward a system that rewards outcomes. He argues that the current model incentivizes quantity over quality, encouraging providers to perform more procedures rather than focusing on the patient’s actual recovery. By rewarding physicians and hospitals for improving patient health, the system can prioritize effectiveness over volume.

3. Lowering Prescription Drug Costs: Addressing the unsustainable rise in pharmaceutical pricing, Markovich called for a restructuring of how intermediaries are compensated. He specifically targeted pharmacy benefit managers, group purchasing organizations, and specialty pharmacies, arguing that these entities should not be rewarded for selling a higher volume of expensive drugs. He also noted similar issues with “spread pricing” and “buy-in billing” practices used by some hospitals and physicians.

4. Establishing Systemic Budgetary Constraints: Markovich suggests placing healthcare organizations on strict budgets with financial consequences for exceeding targets. He contends that the current reimbursement structure incentivizes hospitals to conduct excessive tests and scans or extend overnight stays to increase revenue. Instead, he proposes a fixed monthly reimbursement adjusted for population size and risk. Under this model, hospitals would receive additional payments for improving quality and patient satisfaction, forcing them to optimize efficiency. “I’m going to ask you to do what every average American family has to do, which is make ends meet with a modest increase in your pay every year,” Markovich stated. “That hardly seems like an unfair expectation.”

Photo: pick-uppath, Getty Images

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