Follow the Money
Why Finding your Actual Client Takes Investigative Work
Tina Simpson, JD, MSPH
January 28, 2026 • Founders’ Field Guide to US Health Markets
This is our third installment of the series, check out our first two articles, How EU Founders Misread the US Health Market and Understanding Fragmentation in the US System
The United States healthcare system is, first and foremost (and despite significant public funding), a “free market” system.
The numbers tell the story:
- Roughly half of Americans get their health coverage through employer-sponsored private insurance.
- Another twenty percent are covered by Medicare—increasingly administered through private Medicare Advantage plans.
- Twenty percent receive coverage through Medicaid, the vast majority delivered through privately managed Medicaid MCOs.
- The remainder are covered through individual market plans or are uninsured.
Even programs that are publicly funded flow primarily through private market mechanisms. Medicare Advantage plans manage 54% of Medicare beneficiaries. Medicaid MCOs serve 78% of Medicaid enrollees. Public dollars, private delivery.
This means that to understand how the US healthcare market functions, how purchasing decisions get made, how value is defined — you need to understand it through a payer-driven lens.
The Payer Fragmentation Problem
In most European systems, a single-national or regional payer sets the rules. Providers navigate one set of regulations, one reimbursement structure, one definition of value.
The US operates differently: dozens of payers, each with their own contracts, metrics, and incentives… and this is true for the small family doctor operating independently to the specialist operating in a health system. This is what we mean when we say that the system is “payer-driven.” It is not (just) that the that the entity responsible for financing care delivery drives the direction or priorities of care delivery as a system (that’s universal), but that the fragmentation of payers fundamentally shapes how the market functions. Different payer types and contracts have different rules, risks, and rewards.
For example, that includes different:
- Decision-making processes and purchasing authority
- Reimbursement models and payment mechanisms
- Regulatory oversight and compliance requirements
- Quality metrics and performance incentives
- Definitions of value and return on investment
Put simply:
A U.S. healthcare provider doesn’t manage “patients” in an undifferentiated sense. They manage multiple distinct populations, defined by payer contracts, with varying rules, metrics, and financial incentives.
For example, a primary care practice will simultaneously manage patients covered by (at least) three different commercial insurance carriers, traditional Medicare, two different Medicare Advantage plans, their state’s Medicaid program, and various individual market plans.
Each of these payer contracts represents a different “mini-business” with different contractual obligations, documentation requirements, quality measures, and reimbursement structures.
Yes, that’s a lot.
And it is a big reason why administration costs are so high in the US, compared to other countries (representing up to a quarter of all health expenditures, nationally)
Let me put this in context: a primary care practice will simultaneously manage patients covered by (at least) three different commercial insurance carriers, traditional Medicare, two different Medicare Advantage plans, their state’s Medicaid program, and various individual market plans.
Each of these payer contracts represents a different “mini-business” with different contractual obligations, documentation requirements, quality measures, and reimbursement structures.
What this means for healthtech founders:
This means that when evaluating a digital health solution, U.S. healthtech buyers ask a fundamentally different question than their European counterparts. Not simply: “Does this improve care quality or operational efficiency?” but rather: “Does this improve care quality or operational efficiency in a way that aligns with the specific contractual obligations, financial incentives, and quality metrics we are managing across our payer mix?”
A solution that delivers tremendous value for providers managing Medicare Advantage populations may be irrelevant to providers primarily serving commercially insured patients under fee-for-service contracts.
The same clinical problem can represent entirely different business problems, and advantages, depending on the payer context.
But, Operations are Provider Driven
Following the money tells you where financial pressure and purchasing power live. But it doesn’t tell you the whole story.
Healthcare is ultimately delivered by providers, physicians, nurses, administrators, care coordinators, and the practices, hospitals, and health systems they work within. Clinicians operate within specific organizational structures and clinical workflows. Understanding how care is organized, who controls operational decisions, and what constraints providers face is equally critical.
This creates a fundamental tension in the US market.
The market is structurally payer-driven in terms of money flows and purchasing authority. But it is operationally provider-driven in terms of care delivery and solution adoption.
Financial incentives may flow from payer contracts, but the day-to-day reality of healthcare delivery is controlled by providers managing clinical workflows, patient relationships, and operational constraints.
This means your economic buyer (the person with budget authority and decision-making power) may not be the same person who will use your solution day-to-day. And the person who uses it may not be the person whose operational reality determines whether it gets adopted into actual workflows.
And that gets us back to how fragmentation creates greater complexity.
This split, the need to address payer and provider priorities simultaneously, is where many solutions, particularly those built outside the American context, fail.
A Case Study: DocuAide enters the US Market
Consider a hypothetical example: DocuAide, a clinical documentation tool developed in Germany.
DocuAide uses ambient AI to capture patient encounters and generate clinical notes, reducing documentation time by roughly 40%. In Germany, the value proposition is straightforward: physicians spend less time on paperwork, more time with patients. Practice efficiency improves. Physicians are happier. The ROI is clear.
An American practice administrator hearing the same pitch asks different questions:
“Does it improve my HCC coding accuracy for my Medicare Advantage contracts?”
“Will it reduce claim denials from Aetna?”
“Can it capture the quality measures I need to report for my MSSP ACO?”
“Does it integrate with my EHR’s revenue cycle module?”
Same product. Same clinical or administrative use case. A different evaluation framework.
In the US, a as a business a practice doesn’t manage “patients”; it manages business units and contracts. In order to collect and defend claims paid to a provider for Medicare Advantage patient, the provider needs documentation that captures HCC codes for risk adjustment. That Aetna patient needs prior authorization paperwork. That Medicaid patient’s visit must meet state-specific quality metrics. The same building, same doctors, are treating the same conditions, but operating under different requirements.
DocuAide seeks to reduce the administrative burden on clinicians, but the workflow is shaped by various payer requirements. This means the successful innovator needs to understand integrate those requirements in her solution.
It also surfaces a second problem: ensuring your solution resolves a prioritized, purchasable problem.
Because of fragmentation, often the biggest and most urgent systemic issues are those that aren’t “owned” by any one party. Meaning that a single economic buyer may not have the (immediate) financial incentive to tackle an issue, or lacks the nexus of control to implement the solution.
DocuAide’s founder, might focus on “reducing physician burnout from documentation burden.” This is a real problem. But in the US, physician burnout isn’t the (prioritized) purchasable problem.
The purchasable problem is: “Our Medicare Advantage contract requires accurate HCC coding for risk adjustment, and our physicians are missing diagnoses that cost us $200 per member per month.”
Or: “We’re losing $50,000 a month to claim denials because documentation doesn’t support medical necessity for the commercial payers.”
Or: “We can’t take on more value-based contracts because our current documentation doesn’t capture the quality measures required for performance bonuses.”
The value proposition, therefore, must be framed by payer contract requirements
DocuAide needs to ask:
- Which payer types does the target practice serve? (Commercial insurance? Medicare? Medicaid? A mix?)
- What reimbursement model governs each contract? (Fee-for-service? Capitation? Value-based arrangements?)
- What specific quality metrics or documentation requirements are contractually mandated? (These vary by payer and by contract)
- How does documentation quality affect the practice’s financial performance under each contract?
The same practice managing commercially insured patients under fee-for-service contracts has different documentation priorities, perhaps focused more on coding specificity to maximize reimbursement per visit, or on supporting prior authorization requirements for certain procedures or medications.
Purchasing authority doesn’t rest with end-users
Furthermore, DocuAide’s leadership might assume that if clinicians love DocuAide, adoption will follow. But in the US, clinicians rarely control purchasing decisions.
Budget authority lives with:
- Practice administrators or CFOs (in independent practices)
- Health system IT departments and finance teams (in hospital-owned practices)
- Revenue cycle management leadership
- Population health management teams (for practices taking on risk-based contracts)
These decision-makers evaluate solutions based on measurable ROI: Will this tool increase reimbursement? Reduce claim denials? Improve performance on value-based contracts? Reduce compliance risk? Enable the practice to take on more patients without adding staff?
The decision for adoption, therefore, is not about the actual effectiveness of the product—it’s about measurable financial impact within specific payer contexts.
What this Means for DocuAide’s US Entry
Before DocuAide can develop a go-to-market strategy, it needs to:
- Define the target payer segment(s): Which types of payer contracts create the most urgent need for improved documentation? Where does DocuAide’s functionality align with contractual requirements and financial incentives?
- Identify the economic buyer: Who controls budget for this category of problem? What metrics do they use to evaluate ROI?
- Map the decision-making unit: Beyond the economic buyer, who influences the purchase decision? (Clinicians, IT, compliance, revenue cycle—each will have evaluation criteria)
- Reframe the value proposition: How does DocuAide support the practice’s ability to succeed under specific payer contracts? What measurable financial or operational outcomes can be demonstrated?
- Understand workflow integration requirements: Different payer contracts often require different documentation elements, coding specificity, and quality measure reporting. Can DocuAide adapt to these varying requirements within a single practice?
Without this foundational understanding, DocuAide risks positioning a solution to a problem that, while real, will have no adoption success in a US market.
The TL/DR Takeaway
The U.S. healthcare market is not a single system with a single definition of value. It is a collection of thousands of overlapping markets, each organized around different payer types, each with different incentives, metrics, and purchasing dynamics.
For EU founders, this requires a fundamental shift in approach.
It is not enough that your solution “does a thing”—even if that thing demonstrably improves clinical outcomes or operational efficiency.
You must understand how your solution fits within the specific financial and operational context of a defined market segment, organized by payer type.
Let’s start with the good news: by recognizing and respecting market fragmentation and diversity, market entry becomes more manageable. Instead of needing a strategy to penetrate a 330-million-person market, you are forced to focus on specific geographic markets where your solution has the strongest product-market fit, where you have relationships or local knowledge, or where regulatory and market conditions are most favorable.
You don’t need to “enter the U.S. market.” You need to succeed in small subsections: Ohio, or the Mid-Atlantic region, or among specific safety-net providers in major metropolitan areas.
This is a fundamentally different proposition, and it requires different analysis.
This means being able to answer:
- Which specific payer contracts does your solution support?
- How does it increase revenue or reduce costs within those contracts?
- How does it fit within existing clinical and operational workflows shaped by those payer requirements?
- Who has budget authority to purchase solutions in this category, and what metrics do they use to evaluate ROI?
The complexity and fragmentation of the U.S. market can feel overwhelming. But this fragmentation also creates real opportunity. Different payer segments have different unmet needs, different levels of competitive intensity, and different willingness to adopt innovation.
The US market rewards this level of focus—and punishes companies that try to sell everything to everyone. Expert guidance is a necessity here, not a luxury.
About the Author Tina Simpson is a healthcare strategist and co-founder of Line Axia, a consultancy that helps European healthtech companies navigate U.S. market entry. Having worked on both sides of the Atlantic, she specializes in translating across healthcare ecosystems, 90s adventure films, and regulatory jargon.