Podcast Summary: Transforming Healthcare Affordability at Ascendiun with Paul Markovich

Podcast: Becker’s Healthcare Podcast
Host: Jacob Emerson (Becker's Healthcare)
Guest: Paul Markovich, President & CEO, Ascendian
Date: February 15, 2026

Episode Overview

In this episode, Jacob Emerson speaks with Paul Markovich, the President and CEO of Ascendian (parent company of Blue Shield of California, Alteus, and Stellaris). Markovich discusses his passion for transforming the U.S. healthcare system, the genesis of Ascendian, testifying before Congress on rising healthcare costs, the challenge of scaling affordability, the persistent fax machine problem in healthcare, innovative pharmacy benefit management (PBM) models, industry collaboration, and the need for cultural change and systemic reform.

Key Discussion Points and Insights

1. Ascendian’s Formation and Mission (01:00–02:55)

• Ascendian’s Structure: Blue Shield of California created a nonprofit parent (Ascendian) to facilitate the creation of non-healthplan subsidiaries—Alteus (clinical services) and Stellaris (health services)—enabling broader capital sourcing and scaling opportunities.
• Guiding Purpose: Markovich's career focus has been to make healthcare “worthy of our family and friends and sustainably affordable.”

2. Congressional Testimony – A Broken System (03:54–07:34)

• Testifying Before Congress: Markovich viewed the nine-hour Congressional hearing as a welcome opportunity.

  “I was the only one who was actually looking forward to being there… We think [the system] is dysfunctional, broken, and bankrupting us, and we need structural, systemic change.” (03:54, Paul Markovich)

• Systemic Issues: U.S. healthcare's cost and outcome gaps are driven by systemic incentives to “do more,” lack of digitization, and profit-driven drug distribution.
• Candor and Accountability: Markovich emphasized collective industry accountability and called for tough government intervention:

  “I didn’t see the healthcare system willing to fix itself… it needed some tough love and direction.” (04:11, Paul Markovich)

• Actionable Policy: Praised immediate Congressional policy change on PBMs as a direct response to testimony.

3. The Industry's Sustainability Crisis (08:33–10:06)

• Affordability Gap: The average American cannot afford average premiums without government or employer subsidies, and subsidy sources are strained.
• Industry Mindset:

  “You cannot have a sustainable business in an industry that is not sustainable. And this industry is just not sustainable.” (09:01, Paul Markovich)

• Call to Action: Plans must recognize and tackle ‘cost problem, not a revenue problem,’ using limited resources more productively.

4. Balancing Mission and Margins (10:53–13:23)

• Financial Discipline: Blue Shield caps income at 2% of revenue—actual margin is just 0.23% over five years—contradicting narratives about nonprofit insurer profits.
• Health Plan Responsibility: Health plans must reduce both admin costs and system costs, e.g., by reforming burdensome processes like prior authorizations.

  “Really shame on us as health plans for not having figured out yet how to solve for [fax machines in prior authorization].” (12:25, Paul Markovich)

• Administrative Bloat: Physician numbers have increased 150–200% in five decades, but administrative roles are up over 3000%.

5. The Enduring FAX Machine Problem (13:23–16:00)

• Obsolete Tech: The most common tool in provider-plan communication is still the fax machine—described as “mind-boggling.”
• Barrier to Progress: Lacking a universal, digital health record keeps the industry shackled to inefficiency.

  “What we need to do… is we need every American to have access to a real time comprehensive digital health record...” (14:16, Paul Markovich)

• Real Solution: Digitization, comprehensive records, and automation will enable real-time, frictionless information exchange.

6. Innovating Pharmacy Benefit Management (PBM) (16:00—18:58)

• Unbundled PBM Model: Blue Shield’s new strategy involves Amazon Pharmacy and direct contracting to break the single PBM status quo.
• Three-Part Progress:
  • Admin Success: “Members are getting their prescriptions and getting really good service and we've saved some money from that.” (17:24, Paul Markovich)
  • Direct Manufacturer Contracting: Good savings from handful of deals, but slow due to scale.
  • Eliminating Spread Pricing: Progress difficult, requiring case-by-case negotiations.
• Vision: Move to direct net pricing and away from opaque rebate/fee structures.

7. Collaboration via Stellaris: A New Model for Scale and Innovation (18:58–21:59)

• Blue Plan Collaboration: Hawaii and Kansas Blue Cross joined as co-founders of Stellaris, sharing resources without sacrificing independence.

  “We can jointly invest… and all get access to more cutting edge and modern capabilities… at a lower cost.” (20:24, Paul Markovich)

• Goal: Build scalable tech (e.g., digital health records), automation, and new payment models to help nonprofits remain competitive.

8. Systemic Reform: Budgets and Affordability (21:59–26:04)

• Policy Wins:
  • Praises PBM reform via “landmark” federal legislation and FTC settlements.

  “…the death knell of a business model where the pharmacy benefit managers and their affiliates tie their compensation to the price of a drug.” (23:05, Paul Markovich)

• Top Priority: Implementing a universal digital health record, moving away from fee-for-service, ending spread pricing, and putting healthcare on a budget for predictability.
• How to Move Forward:

  “Explanations aren’t going to cut it… We have to get into a mindset, a different mindset. How do we make health care affordable?” (25:07, Paul Markovich)

• Final Recommendation: Create budgetary pressure to spur innovation and efficiency, shifting focus to producing better patient outcomes at sustainable costs.

Notable Quotes & Memorable Moments

On the State of the System

• “We should all be accountable to the American people for the product we deliver, and it costs too much right now.” (04:20, Paul Markovich)

On Industry Mindset

• “Industry leaders have to, as many other industries have, figure out how to make an impact and do better with fewer resources.” (09:29, Paul Markovich)

On Technological Backwardness

• “I hate the fax machine… There's actually a YouTube video of me smashing one to smithereens.” (14:05, Paul Markovich)

On What’s Next in PBMs

• “…the death knell of a business model where the pharmacy benefit managers and their affiliates tie their compensation to the price of a drug.” (23:05, Paul Markovich)

On Systemic Reform

• “We have a cost problem that we need to address. And I’m hopeful that creating that kind of budgetary, top down pressure is something that helps create that mindset.” (25:26, Paul Markovich)

Important Timestamps

• 01:19–02:55: Markovich on Ascendian’s mission and his career motivation
• 03:54–07:34: Testifying before Congress; highlighting industry dysfunction
• 08:33–10:06: The affordability and sustainability crisis in U.S. healthcare
• 10:53–13:23: Financial discipline vs. affordability; health plans’ responsibilities
• 13:23–16:00: The fax machine problem and digitization as a solution
• 16:00–18:58: Update on Blue Shield’s PBM “unbundling” model
• 18:58–21:59: Stellaris: Cooperative innovation among Blue plans
• 21:59–26:04: Policy reforms’ impacts; vision for systemic cost control

Summary Takeaway

Paul Markovich and Ascendian are at the forefront of driving accountability, transparency, and efficiency in the U.S. healthcare system. By candidly naming the industry’s dysfunctions, pioneering PBM reform, aggressively pushing for digitization, and fostering collaborative innovation through models like Stellaris, Markovich urges health leaders to fundamentally rethink their approach: address root cost drivers, embrace technology, and embed systemic discipline—so the system finally becomes “worthy of our family and friends and sustainably affordable.”