“There Are Too Many Entrenched Interests”

In the value-based scenario, scale is not nearly as important as in fee for service. While it still helps in some ways (e.g. for investing in tech platforms), it’s no longer the primary basis of competition. So in shifting to a value-based arrangement, much of the incumbents’ advantage is reduced.

For a startup focused on customer experience, the employer market will be hard to crack at first—companies are doing the purchasing, and are focused on getting the best terms for themselves, rather than the best experience for their customers.