Incumbent Paradigm · Healthcare Finance · Phase 3: Stressed

The Middleman Problem

Insurance intermediation, PBMs, prior authorization. 34¢ of every dollar to administration. The UnitedHealthcare moment revealed the depth of public rage.

M31 Capital · February 2026
Phase 3
Status: Stressed
3/5
Forces Stressed
$371B
UnitedHealth Revenue
5,000+
DPC Practices (Bypass)

The CEO of UnitedHealthcare was murdered, and the public reaction was recognition, not horror. This cultural signal revealed a depth of rage against the insurance intermediation layer that the industry systematically underestimated. 34¢ of every healthcare dollar goes to administration.

The Bypass Movement

Direct Primary Care — patients paying monthly fees directly to physicians, bypassing insurance entirely — has grown to over 5,000 practices. This is not reform. It is secession. Patients and physicians are simply opting out of the intermediation layer.

Five Forces Assessment
Economic ViabilityStressed — cost spiral outpacing value delivered
Cultural LegitimacyStressed — UnitedHealthcare moment, public rage
Institutional IntegrityStressed — prior auth backlash, PBM scrutiny
Scientific ValidityN/A — financial model, not scientific claim
Regulatory CaptureHolding — ACA mandate + employer tax incentive
Replacement
Direct Primary Care
5,000+ practices bypassing insurance. Growing 20%+ annually.
Replacement
Tech-Native Insurance
Oscar Health building insurance as technology platform.
Catalyst
PBM Reform Legislation
Bipartisan support for transparency. Any reform weakens intermediation.
Risk
ACA Mandate Removal
Removal activates short thesis on traditional insurance.
M31 Assessment

The Middleman's Days Are Numbered

Phase 3 — cultural legitimacy collapsing faster than regulatory structure can adapt. Long DPC infrastructure and tech-native insurers.