Newt’s World (Gingrich 360):

Episode 922 – The Rising Cost of Healthcare

Guest: Brian Blaise, President of Paragon Health Institute
Date: December 21, 2025

Overview

In this episode, Newt Gingrich sits down with Brian Blaise, president of the Paragon Health Institute and former Special Assistant to the President for Economic Policy, for a hard look at the dramatically rising costs in the American healthcare system. They explore the roles of government policy, systemic fraud, market distortion, and regulatory failure in making healthcare unaffordable for many Americans. The conversation emphasizes the need for reform grounded in transparency, competition, and consumer empowerment.

Key Discussion Points and Insights

1. The Mission and Origin of Paragon Health Institute

Timestamps: [04:34]–[07:26]

• Paragon’s Purpose: Blaise shares that Paragon Health Institute was founded to fill a void in thoughtful, free-market healthcare analysis and reform.
  • Focus on analyzing how government programs actually function, not just their stated intentions.
  • Develops policy reforms based on “expanding choice, injecting market competition, and fostering innovation.”
• Legislative Impact:
  • Assisted with big reforms in Medicaid, including community engagement and work requirements for able-bodied adults.
  • Focused recent efforts on exposing issues with Obamacare and showing the downsides of expanding insurance subsidies.

2. Systemic Fraud and Incentive Failures in Public Healthcare Programs

Timestamps: [07:26]–[15:11]

• Medicaid and Obamacare Vulnerabilities:
  • Gingrich cites billion-dollar fraud in Minneapolis and $120 million in New Jersey as cases where bureaucratic incapacity enabled massive theft.
  • Blaise explains federal-state Medicaid cost incentives (“when states spend more, they get more federal money”), which invite waste and fraud.
• Phantom Enrollments:
  • Blaise highlights “phantom” Obamacare enrollees: “We estimate that about actually more than 25% of all Obamacare enrollment in 2025 is improper. And many of these enrollees don't have any idea that they're enrolled in the program.” ([11:05])
  • Insurers benefited massively from millions of people signed up for plans they don’t use or even know about.
  • “Turns out that the growth of zero claim enrollees went from 4 million in 2021 to almost 12 million people in 2024. So 40% of enrollees in 2024 in Obamacare didn't use their health plan a single time.” (Brian Blaise, [12:54])
• Inadequate Program Safeguards:
  • The GAO submitted 24 fake applications; 23 were approved. ([13:33])

Memorable Quote:
"It is so corrupt, Mr. Speaker, because the subsidy goes directly from the US treasury to the health insurance company and because of the Biden policy, the enrollee is paying nothing, so they're not aware that they're even enrolled in the coverage."
— Brian Blaise, [14:30]

3. The Distorted Healthcare Market & The Role of Consolidation

Timestamps: [19:14]–[29:09]

• Ineffective Market Structure:
  • Average family of four projected to pay $26,000 in annual healthcare costs in 2026 ([19:59]).
  • Hospital prices have risen three times faster than overall inflation since 2000 ([20:52]).
  • Medicare payment policy incentivizes consolidation: hospitals acquire doctor’s offices to bill at higher hospital rates.
  • 90% of spending passes through third-party payers; consumers have little control.
  • Blaise: “The more complexity, the harder it is on the small guys, because there’s fixed costs in complying with all of this regulation and administrative burden.” ([21:57])
• Obamacare’s Role:
  • Obamacare increased market consolidation, reducing competition among insurers and providers.
  • “97% of inpatient hospitals lack meaningful competition. So you now are building hospitals that don't have any competition and they're increasing their prices 15 to 30% instead of having competition drive costs down.” (Newt Gingrich, [26:35])
• Antitrust Challenges:
  • The Federal Trade Commission and DOJ can block mergers, but cannot keep up with the sheer volume of healthcare mergers ([29:09]).

Memorable Quote:
“Normal economics apply to the healthcare sector too, and where we've lost competition...that leads to upward pressure on prices. And it actually also worsens quality because you need to have competition for healthcare quality as well.”
— Brian Blaise, [27:46]

4. Hidden Prices and Lack of Transparency

Timestamps: [23:33]–[24:19]

• Gingrich and Blaise agree that even with more consumer control, patients cannot make informed choices without price and quality transparency.
  • The Trump administration initiated steps toward hospital price transparency; Blaise calls this “a work in progress.”

Memorable Quote:
“20% of the economy and prices are hidden from patients and they're hidden from employers, because employers do a lot of their shopping in healthcare.”
— Brian Blaise, [23:46]

5. The Cost Explosion and Crowding Out of Wages

Timestamps: [24:19]–[25:12]

• Healthcare spending has risen from 13% to 18% of US GDP since 2000—a 38% increase in its share of the economy.
• Rising insurance costs crowd out wage increases for working Americans.
• Entitlement spending growth (Medicare, Medicaid, Obamacare) is driving federal budget imbalances and higher interest payments on debt.

6. Enforcement, Program Integrity, and “Uncatchable” Fraud

Timestamps: [33:09]–[36:11]

• The system’s complexity and the amount of money involved leave bureaucracy unable to monitor fraud.
• Some states have little incentive to monitor fraud when federal dollars are on the line. ([33:38])
• Notable Case: Two brokers in Florida enrolled homeless and fictional individuals, generating $230 million in insurance subsidies for themselves and insurers ([34:39]).
• Explosive examples include catheters and autism: dramatic, inexplicable increases in use or billing should trigger review, but are missed for months or years.

Memorable Quote:
“If Minnesota was spending its own money rather than the federal money, they would have large incentives to crack down on the fraud and abuse within the program. But when it's mostly federal spending, they have incentives to just look the other way.”
— Brian Blaise, [34:07]

Notable Quotes & Moments

• On Bureaucratic Incentives:
  • “The crooks have a lot bigger incentive to steal than the bureaucrat has to protect.” — Newt Gingrich, [08:02]
• On Phantom Enrollments:
  • “Insurance companies have gotten rich off this system without providing any health care services on behalf of millions of these enrollees.” — Brian Blaise, [14:44]
• On Market Dysfunction:
  • “We're asking families to buy the equivalent of a small car every year.” — Newt Gingrich, [19:46]
• On the Limits of Antitrust:
  • “It's also limited in just the capacity of the federal agencies versus the magnitude of the mergers and acquisitions that have been proposed.” — Brian Blaise, [29:09]
• On Consumer Power:
  • “We should move federal subsidies away from funding the system, away from just going directly to health insurance companies and give the money to the patients.” — Brian Blaise, [22:32]

Timestamps for Key Segments

• Introduction and Context: [03:10]
• Why Paragon Health Institute was Founded: [05:07]
• Big Medicaid, Obamacare, and Fraud Cases: [07:26]
• Phantom Enrollment and Zero-Claim Recipients: [12:24]
• GAO Test and System Loopholes: [13:33]
• Root Causes: Market Incentives and Consolidation: [19:59]–[27:46]
• Transparency in Healthcare Pricing: [23:33]
• Antitrust and Market Competition: [28:45]
• Failures in Enforcement and Program Integrity: [33:09]–[36:11]

Tone and Language

• Accessible, conversational, yet data-driven.
• Newt Gingrich is direct, often framing problems in historic or systemic terms, and injects humor (e.g., the “Breathing Insurance Recipient Bill”).
• Brian Blaise speaks authoritatively and succinctly, supporting arguments with recent data and research findings.

Conclusion

This episode offers a wide-ranging critique of how federal policy and perverse incentives have inflated healthcare costs, enabled fraud, and eroded both value and trust in the system. Blaise and Gingrich repeatedly stress that without empowering consumers, restoring transparency, and reversing anti-competitive consolidation, the American healthcare system will remain unaffordable and unsustainable.

Listeners are encouraged to learn more at paragoninstitute.org.