There is a particular kind of education that comes from growing up far from everything. Kelly Fristoe (pictured) President of Financial Partners in Wichita Falls, Texas, grew up on what amounted to a working ranch in a small rural West Texas community: horses, cattle, chickens, swine, and member of the Future Farmers of America. It was not exactly the obvious launchpad for a career dismantling the American healthcare industrial complex. But then, not much about Fristoe’s journey has been obvious.
When Fristoe’s father, a truck driver whose routes took him across the south-central United States, was frequently on the road, it fell to a teenage Fristoe to sit beside a mother working her way through nursing school examinations. “It was something that kind of stuck with me,” Fristoe recalls. Healthcare was in the household long before it was in the business card.
The natural next step, or so it seemed, was pharmacy. Fristoe worked in a hospital pharmacy during the college years, took the science classes, and fell in love with the work. The problem, as Fristoe puts it with characteristic directness, was the grades. “I was a horrible college student,” comes the admission. Pharmacy school remained out of reach. A young family was incoming. A different plan was needed.
The plan arrived, as it so often does in Texas, in the form of a newspaper advertisement. The pitch was simple: if you can survive on $2,000 a month until your skills improve, come to this job interview. In the mid to late 1980s, that was not a bad offer. Fristoe went. The job was selling insurance door to door from a memorized script.
The early years were not romantic. Fristoe was not a natural salesperson. “I was not a fast starter in this business by any means,” Fristoe says. “If it wasn’t for my wife’s good nursing job at the time, we would have starved to death.”
After becoming licensed, Fristoe returned to prior customers with better products from more reputable carriers, and began doing something the door-to-door script had never covered: staying around, following up and being there when a claim needed processing.
A brief attempt to make things work at Metropolitan Life, where the expectation was that someone in their early twenties would walk into rooms with 70-year-old farmers and sell them estate-planning life insurance, ended predictably. Fristoe went independent: no guarantees, no advances, no floor. “Everything, I guess the saying goes, you eat what you kill.” It took five years before that model reliably covered the bills.
What followed those five years grew well beyond what Fristoe had imagined. A boutique agency, still in Wichita Falls, Texas: a place Fristoe has no intention of leaving.
The name Financial Partners came from an early ambition to be everything to everyone: health insurance, mutual funds, CDs, retirement income. That ambition ran into a wall. “I got spread way too thin,” Fristoe says. “I really wasn’t doing any one thing well.”
The solution, drawn from the unlikely philosophical wellspring of the TV sitcom Parks and Recreation, came in the form of a Ron Swanson aphorism that Fristoe now applies as professional doctrine: “Never half-ass two things; whole-ass one thing.”
The retreat to a single specialism produced something unexpected: a new identity. On LinkedIn, Fristoe began describing the role not as a health insurance broker but as something else entirely. “I’m a healthinsurologist,” Fristoe says. “I head the Department of Healthinsurology here at Financial Partners.” The title was designed to do two things: signal specialist expertise and open a conversation. It does both.
The name Financial Partners, meanwhile, still causes some confusion. People assume it is a financial services firm. Fristoe has made peace with that. “It gives me an opportunity to stop the conversation and explain,” Fristoe says, “that we are an organization that’s trying to partner with you to help you make smarter financial decisions in this healthcare industrial complex that is profiteering off of us.”
Few things animate Fristoe more than the question of what Americans actually know about the cost of their healthcare. The short answer, in Fristoe’s view, is almost nothing. And the system, Fristoe argues, has been specifically designed to keep it that way.
To explain how, Fristoe reaches for “The Matrix” which imagines a world where humanity is unknowingly enslaved by machines. People believe they are living normal lives, unaware that they are trapped in a simulated reality while their bodies are used to generate energy. They think they are free, but in truth, they are a resource.
For Fristoe, the parallel with American healthcare is not metaphorical flourish. It is a structural description. “Healthcare is one of the only things in life that we buy without knowing what the cost of it is until after we bought it,” Fristoe says. “There is nothing else in life that we buy like that.” The employer pays the premium. The employee pays their share. Neither has any say in the payment rates the insurer negotiates with providers, any visibility into the contracts that govern those rates, or any real understanding of the financial relationships that sit behind every referral, every procedure, and every prescription.
The Affordable Care Act’s medical loss ratio rules, which limit large group insurers to 15% profit and small group insurers to 20%, have made this worse, not better, in Fristoe’s assessment. Because profit is calculated as a percentage of total spend, keeping payment rates high serves the insurer’s shareholder interest directly. “A CEO that reduces costs like that, revenue for the insurance company several years in a row, isn’t going to be CEO very long,” Fristoe says. “They answer to the shareholders first. Not the patients. Not the insureds.”
The downstream effect, Fristoe argues, has reached well beyond corporate balance sheets. Annual employer health premium increases of 15 to 20% for more than two decades have quietly swallowed what might otherwise have been wage growth. “These employees, they’re getting wages, alright, but it’s not ending up in their bank account,” Fristoe says. “It’s ending up in the insurance company’s bank account.”
The mechanism behind hospital pricing is something Fristoe takes particular pleasure in dissecting, partly because the evidence is so immediate. Last week, a client needed an MRI. Rather than going to a hospital owned facility, they went to a standalone imaging center and paid the cash price. The bill was $600.
The hospital chargemaster rate for the same scan, by Fristoe’s reckoning, would have run them around $4,000. The standalone center, which bears no tax-exempt status and claims no federal disproportionate share payments, still made money. That gap of more than $3,000, according to Fristoe, is not a margin: it is an artefact of the chargemaster's inflated pricing, not a measure of economic value.
The chargemaster is the starting point for hospital revenue management. It is a largely notional figure from which negotiations proceed, with uninsured patients and under-resourced communities often left closest to the inflated number while the system collects federal reimbursement based on uncompensated care figures drawn from the same inflated baseline. “The numbers that get submitted to the federal government are the inflated numbers that are not real expenses,” Fristoe says.
The Surgery Center of Oklahoma City is, in Fristoe’s telling, one of the exceptions that proves the rule. A for-profit, taxpaying ambulatory surgical center, it publishes fully bundled, all-inclusive prices for every procedure online: surgeon, anesthesiologist, imaging, pathology, all included. A standard gallbladder removal, comes in at under $7,000. The same procedure at a local hospital in Wichita Falls runs from $40,000 to $50,000. The Surgical Center of Oklahoma, Fristoe is at pains to note, is still profitable.
Fristoe has built self-funded employer health plans around that gap. When an employer moves to a self-funded structure and can waive the employee deductible, covering transport, hotel, and meals for an employee to travel to Oklahoma City for a procedure, the total plan cost for that gallbladder surgery comes to roughly $9,000 instead of $40,000. “That is how you reduce healthcare,” Fristoe says. “You have got to reduce the healthcare spend that the health plan is doing.”
Pharmacy benefit managers are, in Fristoe’s view, the most instructive example of how the architecture of American healthcare serves everyone except the person paying into it. PBMs are a uniquely American invention: no other country uses them. They were introduced as cost controllers. They have become, Fristoe argues, cost extractors.
The evidence, as Fristoe presents it, is structural. UnitedHealthcare owns Optum, its PBM. CVS owns Aetna. Express Scripts is aligned with Cigna. “Whenever you have a situation where there’s profits made at the PBM level, that flows back up to the insurance company,” Fristoe says. The insurer profits from both the premium and the drug transaction. The employer pays for both.
UnitedHealthcare has, in recent years, taken vertical integration further still. It has acquired hundreds of thousands of physician practices across the United States. It now controls, in Fristoe’s words, “the financing mechanism, the pharmaceutical silo that exists in that equation, and the healthcare delivery system at the clinic level.” The insurer is simultaneously the facilitator of payment the pharmacy manager, and in many cases the prescribing physician’s employer. The concentration of these roles within a single corporate structure inevitably raises questions about potential conflicts of interest.
Most broker compensation rises automatically when premiums rise. It is, as Fristoe describes it, a structural alignment between broker and insurer that leaves the employer on the outside. The Financial Partners fee structure has been deliberately built to invert that relationship. “I want to get paid more only if I save you more,” Fristoe says.
The practical consequence is a model in which the advisor’s financial interest and the employer’s financial interest move in the same direction. It is, Fristoe acknowledges, a harder sell than the conventional arrangement. Employers are accustomed to advisors whose compensation is bundled invisibly into the premium. Making the advisory relationship explicit and linking it to outcomes requires a different kind of trust.
“An education is what you get when you read and understand the fine print,” Fristoe says, “an experience is what you get when you don’t.” Employers, in Fristoe’s experience, have mostly had “the experience.”
In The Matrix, the moment of reckoning arrives when the hero is offered a choice between two pills. The red pill will reveal the truth about the world: painful, disorienting, and impossible to un-know. The blue pill will return things to exactly as they were, the comfortable simulation intact, the machine humming along undisturbed. It is a choice between clarity and convenience, between confronting an uncomfortable reality and choosing not to.
Fristoe applies that choice directly to the employer conversation. Take the red pill, and together they dive into the detail of what the health plan is actually spending, where the money is going, who is benefiting from that arrangement, and what a different structure might look like. Take the blue pill, and the employer returns to the status quo: annual renewal, automatic increase, no questions asked. “They just want to push the easy button,” Fristoe says. “They just want to make their widgets and take care of their employees, and at the end of the day, have a healthy internal rate of return.”
Fristoe is under no illusion that this is an easy sell. The diagnosis requires employers to do something genuinely difficult: to look carefully at a problem they have spent years routing around and to invest time, energy, and organizational will in addressing it. The things Fristoe describes are, by Fristoe’s own admission, hard work. None of it is easy.
Fristoe invokes Tony Robbins to explain why change will come regardless. “People do one of two things: they move away from pain or toward pleasure.” For most employers, the threshold of financial pain has not yet been crossed. But annual premium increases of 15 to 20% are compounding. The math is not sustainable.
Employee behavior presents a separate obstacle. Even where employers adopt self-funded plans and build in financial incentives to use lower-cost facilities, many employees refuse to travel. Their doctors have recommended local providers. They do not want to leave town. The plan pays the difference, and the savings do not materialize. “You have got to become a better steward of the healthcare dollars that are being made available to you,” Fristoe says. “And some employees just do not get that.”
The employers Fristoe most wants to reach are those who have already crossed their own pain threshold and are looking for something better. “If everyone took the red pill, we’d all be enlightened,” Fristoe says. “There would be more transparency in the cost of care.”
There is one argument Fristoe makes that has the ring of something genuinely new. The conversation around patient wellbeing, at the policy level and at the employer level, is framed around two dimensions: physical health and mental health. Fristoe believes there is a third that the system ignores almost completely.
“There’s another level of health that the system is ignoring entirely,” Fristoe says, “and it’s the financial health of the patient.” An unexpected medical bill of several thousand dollars does not simply cause financial stress. It changes behavior. It delays the next appointment. It sits in the background as a deterrent to seeking care until the problem is significantly worse.
A growing community of advisors, Fristoe says, is beginning to address this gap directly: helping patients find a $400 CT scan instead of a $4,000 one, or an X-ray for $44 instead of $300. These are not marginal savings. They are the difference between a patient who engages with their healthcare and one who avoids it.
“Healthcare has to be treated as a manageable cost center,” Fristoe says. Not a fixed and unknowable expense, but a category that rewards the same scrutiny and stewardship as any other line on a business budget.
Away from the office, Fristoe is, by self-description, a simple person. The irony of a career built on sales and advocacy is not lost on someone who identifies, quite firmly, as an introvert.
The recharge comes from family: from conversation, from laughter, from the particular solitude of doing one’s own yard work at one’s own pace. “Nobody can mow your grass as good as you can,” Fristoe says. “There’s some solitude that I get when I mow my own grass. I’m having my own thoughts.” It is, in its way, the same instinct that drove the retreat from trying to be everything to everyone: the recognition that doing one thing well, and doing it with full attention, is not a limitation. It is the whole point.
The reading list, too, reflects that sensibility. Fristoe is working through “Unreasonable Hospitality” by Will Guidara, a book about a New York City restaurant that had already optimized everything it could possibly optimize and found its competitive edge, not in trying to improve its menu or wine list, but in the depth of its service. “There’s those kind of lessons that can be learned,” Fristoe says. Leadership books. Growth books. Books that provide something actionable rather than volume for its own sake.
In a world that runs on quantity, Kelly Fristoe is still holding out for the whole-ass approach.
