Inside Medicare Pricing and Policy: Douglas Jacobs on fee schedules, primary care, ACOs, and AI.

In this episode of Analyzing Healthcare, host Roy Bejarano speaks with Douglas Jacobs, former Chief Transformation Officer at Medicare, former Chief Medical Director at the Pennsylvania Department of Health, and a practicing primary care physician, to unpack how Medicare sets prices—and why those decisions shape the entire U.S. healthcare system.

Drawing on his experience inside CMS and on the front lines of care, Jacobs explains why Medicare pricing is constrained by statute, excludes demand, and has historically underpaid primary care and behavioral health. The conversation covers the latest physician fee schedule, advanced primary care payments, ACO performance, quality measures that improve outcomes, the limits of AI, and lessons from Pennsylvania’s managed care model.

What You’ll Learn

✅ How Medicare prices care — and why demand is excluded by law

✅ Why Medicare reimbursement anchors commercial insurance pricing

✅ How underpayment of primary care reshaped the physician workforce

✅ What changed in the latest Medicare physician fee schedule

✅ Why primary-care-led ACOs outperform large health-system ACOs

✅ Why AI cannot fix healthcare without structural access reform

Timestamps

• (00:00) Introduction: Medicare leadership and practicing medicine

• (01:14) Initial impressions of the new Medicare fee schedule

• (02:30) Specialty winners, conversion factors, and efficiency adjustments

• (04:20) Why Medicare pricing ignores market signals

• (07:03) Demand, supply, and the broken market signal

• (08:49) Primary care underpayment and workforce impact

• (11:02) How commercial payers follow Medicare pricing

• (13:33) Advanced primary care management payments

• (16:15) Why primary-care-led ACOs save more

• (22:35) Quality measures that reduce mortality

• (24:54) AI skepticism and access limitations

• (28:50) Pennsylvania’s managed care and cost controls

Key Takeaways

• 💎 Medicare pricing is supply-driven and sets the reimbursement anchor for the market

• 💎 Underpayment of primary care has lasting workforce and access consequences

• 💎 Advanced primary care and primary-led ACOs deliver stronger savings and outcomes

• 💎 Simple, focused quality measures can materially reduce mortality

• 💎 AI cannot fix healthcare without addressing structural access and equity gaps

Resource Links

Guest: Douglas Jacobs – Former Chief Transformation Officer, Medicare Host: Roy Bejarano – Analyzing Healthcare Community: ⁠www.scale-community.com⁠ Podcast Hub: Analyzing Healthcare by SCALE Community

Guest Bio

Douglas Jacobs is a practicing primary care physician and former Chief Transformation Officer at Medicare, where he spent nearly four years helping shape national payment, quality, and value-based care policy. He previously served as Chief Medical Director at the Pennsylvania Department of Health, overseeing large-scale managed care programs and quality oversight. His work spans physician payment reform, ACO strategy, primary care transformation, and national quality measurement, bringing together frontline clinical experience with federal and state health policy leadership.

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