Decoding the Changing Healthcare Marketplace with Industry Leaders

What if your small business had to navigate a health insurance market that's shrinking by the day? Join us as we unpack the recent upheavals in Georgia's small business health insurance scene, catalyzed by the exit of Cigna Oscar. Matt Usher joins us to dissect the challenges for employers with one to 50 full-time employees in this suddenly volatile market. Learn why the departure of major players like Humana has left only a few competitive options and what practical steps you can take to prepare for future insurance renewals without losing your cool.

We then take a closer look at the seismic shifts in the broader healthcare landscape. Tech giants like Walmart, Amazon, and Best Buy are making bold moves into healthcare services, but can they really disrupt a sector as intricate as healthcare? We'll explore the unique financial dynamics, the pitfalls of vertical integration, and why primary care often acts as a loss leader. Plus, get an inside scoop on Amazon's evolving health initiatives amidst leadership shake-ups and what this could mean for the future.

Finally, we explore the intricacies of the Direct Primary Care (DPC) model and its juxtaposition with traditional insurance metrics. Understand how personalized care and direct doctor-patient communication can offer substantial benefits yet face hurdles like scalability and affordability. We'll discuss potential solutions like bundled plans and better insurer-provider collaboration and examine the implications of the Consolidated Appropriations Act on price transparency and fiduciary responsibility. Get ready to gain insights into navigating an ever-changing healthcare landscape with confidence and clarity.

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Transcript

Speaker 1: 0:52

I'm excited that I'm sitting here today with two wonderful people, one of whom I think most of you know really well, and that is Jason Crosby. Jason, welcome to the show.

Speaker 2: 1:03

Good morning, aaron, good morning.

Speaker 1: 1:05

And we're joined today with Matt Usher. Matt has joined the episodes before and he's always given us really great insights into what's going on in the industry. So welcome to the show, matt.

Speaker 3: 1:20

Hey Aaron, hey Jason, Happy to be here, happy to have you here.

Speaker 1: 1:24

So, kind of before we launch into all the questions, maybe we have some listeners who don't really know what you do Can you kind of give us an intro of who you are and why you're considered an expert?

Speaker 3: 1:36

Yeah, yeah, appreciate the expert comment. We'll see if I can live up to it. But I've been in the employee benefits so primarily medical insurance and other core benefits market for close to 20 years now and we're in Georgia, so you know we're helping clients with businesses down to two employees all the way up to. We work with employers of over 1,000 employees and, again, primarily focused on that medical insurance piece but really all things benefits related outside of 401k plans With everything that's going on in our market. So much volatility kind of rests on the medical insurance and healthcare delivery and healthcare finance. So that's really where I spend most of my time is trying to solve those issues for employers and improve the experiences that they have and their employees have when they actually need care.

Speaker 2: 2:34

To jump right in on that note. You had mentioned the smaller employers and we are very timely with some news. I think, as of this recording, we're 48 hours post a significant announcement, at least in our state. Those that are listening know we're in Georgia. You had Cigna Oscar announce a departure. They have a pretty competitive, fully insured small business product, as I recall. Why don't you talk to that and what that does to not just the Georgia market at 25, but what that typical departure and the impact it can have for our small business listeners?

Speaker 3: 3:13

Yeah, very, very recent news, just as of Tuesday, like you said, and just to define that small business market, because a lot of people might not really know what that means In Georgia, if you're an employer that has one to 50 employees, typically full-time employees, then you are purchasing insurance in the small business market. So Cigna Oscar entered Georgia's small business market as kind of a coordination between Cigna, the health plan, and Oscar, the technology company, and they really created a pretty unique set of products and that occurred back in late 2019, I think, is when they really went full tilt in the Georgia market, so expanding kind of beyond Atlanta to almost the whole state. At that time they came in, they were very competitive. They gave a lot of our clients that were in that fully insured market an opportunity to maybe improve their plans or reduce their cost. Maybe improve their plans or reduce their cost. But shortly after their entrance into the market, because that market is so price driven, they picked up a lot of business, they grew rapidly, they dealt with some growing pains and unfortunately they've announced the news that we're talking about today they're exiting that small group market in Georgia and honestly, it doesn't really surprise me because, going back to it being price driven. If you're just one or 2% less in that market, you're going to get a majority of the business because employers are looking to save money in that market just about as any way shape that they can, as long as you still have somewhat of a quality product. If your price is less, they're going to consider it. And that market has just been so volatile lately because you had Humana exit just in the last 12 months. So we lost another fully insured company just a year ago.

Speaker 3: 5:17

We still have clients that are on Humana plans that are going to be rolling off in the next couple months and a likely step for them would have been to go to one of these Cigna Oscar plans. And now it's kind of like all right, well, you had to stay in this market. You stayed with Humana for as long as you could. Unfortunately, cigna Oscar isn't even really going to be an option for you and even if it was, it's only another 12-month solution.

Speaker 3: 5:44

So the big picture if you're a small employer in Georgia, you've now lost two companies in the last 12 months and that really leaves three companies that are in the market and you can't see this. But I'm doing air quotes because just because you're in the market doesn't mean that you're actually competitive. Um, so, even though there will be a couple insurance companies and maybe some regional insurance companies that participate in certain areas of georgia, the cost for those plans is going to continue to rise. And it's really unfortunate because we went from maybe a seven or eight insurance company market kind of pre-Affordable Care Act to now we're down to, like I said, two or three, and again, if you take into account their actual competitiveness, it's really going to be like one when it's all said and done, because you may not be able to afford the other two companies just from their premium standpoint.

Speaker 2: 6:47

So maybe dive in a little deeper. So we're midway through the year. I guess that's one good thing. I guess you could say about such an announcement At least it's not terribly late for the small business owner. Now, what kind of guidance would you give them? Okay, hey, you've got some time. It's June by the time they're listening. Let's say, what guidance would you give to them now to start preparing, knowing that news that there's less out there for them to explore like that? What would you tell them to do here at the halfway point?

Speaker 3: 7:18

Yeah, the good thing is that timing piece. So the first thing is, hey, don't panic. Regulation-wise, they have to give you a certain amount of time before your plan would be non-renewed. So time is on your side. What we're going to be communicating with them is we have time, but we're not going to just lackadaisically approach this. We're going to go ahead and get ahead of what those other options might look like, conceptually, talking through non-traditional plans, because that is a big part of what we're doing today with our clients.

Speaker 3: 7:55

So, stepping outside of that traditional market, which many of them have already heard this, but it's just, you know, for every carrier that exits the fully insured market, there's five or six new non-traditional companies that are coming into the market trying to grab some business. So, while one market is less competitive, there's plenty more options that you should be discussing. So, really, just kind of taking the time to make sure they understand that education piece, understand their options, but also trying to address it strategically. Maybe you are a 7-1 renewal or an 8-1 renewal or a 9 or 10-1 renewal or one of those off-cycle renewals, like what we call it. Well, your options on January 1st are probably going to be the same as the options that you would have on 7-1 of 25 or 9-1 of 25.

Speaker 3: 8:47

So you can take advantage of this market exit by Cigna Oscar and maybe realign your plan and go ahead and move to one of these alternative plans, hopefully to save money or improve your plan design versus what you have with Cigna Oscar. So we're just kind of giving them the options. Hey, educating what's out there financially doesn't make sense. To consider this ahead of your exit date, right? So why keep riding the train all the way until it falls completely off the train tracks? Let's take action now if we can or if it makes sense, but also just not to feel rushed about it and to be comfortable with whatever direction they're going in.

Speaker 1: 9:27

Now, matt, obviously you're focused on the Georgia market, but I'm sure you talk to others in the industry outside of Georgia. Are we seeing this play out or is this just a microcosm that's happening here locally in the Southeast? What are you seeing? Is this a nationwide issue? I guess is really the question.

Speaker 3: 9:51

I believe it is a nationwide issue. I relate this whole small group so small business experience to the Affordable Care Act implementation in the individual market for the years of maybe 15, 16, and 17. I think I may have touched on this the last time we did a show, but the Affordable Care Act actually implemented the rate regulations in 2014. So, even though it was passed well before then, the actual premium impact that it made to the market and the underwriting impact didn't occur until 2014. And what we saw on the individual market was five, six, maybe 10 companies, depending on what state that you were in, participating in that individual market. They had relatively good premiums, all things considered, and they had pretty rich plan designs. But as time went on, because it is such a price-driven market, being 1% less, being 5% less, being 10% less, meant you could potentially get a significant market share of the business, and market share usually is a good thing for most businesses. Like, you want market share, but in the health insurance market, it can be a bad thing because you're getting all the risk and you may end up getting too much of the bad risk. So what happened from 14, 15, 16, and maybe 17 is again going from seven or eight companies offering plans in that individual market, down to in Georgia in certain counties you only had one insurance company and that existed for maybe two or three years after that whole exit from the other insurance companies in that market. Now it's kind of funny in the individual market we're back up to maybe six or seven carriers in Georgia. So it kind of went from, you know, everyone was in then a couple years down the road everyone was out. They all kind of regrouped, re-huddled and now they're back in and during that time period those premiums have actually stabilized. I mean, of course they're going to continue to go up, you know, annually, but the trend increases in the individual market are certainly a lot less than what you see in the employer market, especially in the small employer market. So I'm kind of looking at it from a standpoint of, hey, what did we learn from the individual market? And is the same thing happening to the small group market? I believe it is. I believe we're getting into a situation where when you only have one or two companies left, you're going to get all the risk and there's going to be some bad risk in there. Um, so I'm kind of trying to see you know what's this going to get all the risk and there's going to be some bad risk in there. So I'm kind of trying to see you know what's this going to look like three or four years down the road.

Speaker 3: 12:43

I imagine that we will have more companies come into the marketplace. But their plan designs, their networks, their steerage you know those types of things are going to have to change in order for them to be affordable and to be able to manage the risk. And that's exactly what happened in the individual market. So I know it's happening in Georgia. I do believe on a national level it's also happening. To your point, aaron. A lot of these insurance companies operate in 30, 40, maybe all 50 states. So you have to look at the Humana exit was national. Cigna Oscar, I think, is still going to be regional. But in the other states that they operate in, I wouldn't be surprised if they have similar experiences where you know they might be taking a step back or maybe increasing their premiums above market average to kind of offset new risk.

Speaker 1: 13:39

Speaking of risk, that's a good segue there. You know we are seeing a lot of risk, not just in the patient side of the market, but also in the provider side of the market too. You know there's all of these and if anyone's listened to this show for any length of time, they've heard us talk about these market disruptors. You know the big names Best Buy, walmart, amazon entering into the healthcare field to provide more direct primary care, for lack of a better term. You know, outside of the world of insurance and in providing clinics and that sort of thing. But there's been a lot of headlines now showing that that is even undergoing some turmoil. I know that's kind of extra insurance, but it certainly applies to this conversation. How is that shaping the industry right now and where do you see that headed?

Speaker 3: 14:31

Yeah, it's been really interesting to see the kind of the recent news of Walmart basically getting out of their private clinic or primary care type of strategy. And it's interesting because you look at these companies like a Walmart or an Amazon. You know they have their stuff together. You know that if we're talking about volume or we're talking about scale and disrupting a market, they have the tools and resources to be able to do it, but they haven't dealt with the beast that is healthcare and how confusing and complicated healthcare is. So I'm sure that there's a lot of things that they were going to do and might have even worked and implemented strategies that would actually disrupt the market like you're talking about, which From the consumer side, you know you want more access to care and you want easier access to care. Well, over a year now when, when the hot topics of Amazon and Walmart and Best Buy and stuff like that. But I think one of the things that I've recently kind of thought of at a high level and I have to give some kudos to Dr Eric Bricker because he was the one that really helped open my eyes to this piece but you know there's a belief that primary care is kind of like a loss leader in the market and with all of the provider consolidation and all the vertical integration. So we have it on both sides.

Speaker 3: 16:25

You've got providers being bought by larger provider groups or hospital groups.

Speaker 3: 16:31

You've got insurance companies buying provider groups or buying, you know, the surgery centers or hospital systems and consolidating or vertically integrating to keep care within their channel and thinking of it as a loss leader.

Speaker 3: 16:49

You're just trying to get the person in the door for that primary care visit, but you're really going to make the money when they refer to a specialist within your organization or when they need surgery or imaging within your organization.

Speaker 3: 17:01

So I think one of the main stumbling blocks to the Amazon strategy or the Walmart strategy is, if you're focusing just on the primary care piece, you're really not generating the revenue that you used to be able to generate in that market and the true revenue comes from these referral and specialty care and surgical care and stuff like that. So that's something that I hadn't really thought about until this recent news and you kind of peel back the onion and you think about it that these primary care doctors are getting suppressed right from a timing standpoint. They only have a few minutes with each of their patients. I know that the insurance companies are beating down their negotiations every year, right, so they're spending less time with the patient, they're getting paid less. Yet these larger organizations are still buying them, right, and they're buying them so that they can keep that care steered within their organization to be profitable services.

Speaker 1: 18:05

Yeah, and I also think there's the kind of that tech bro mentality that comes from these bigger companies like the Amazons, where you know, hey, we'll just write some lines of code and somehow magically the process gets better. That this approach of these big names wading into health care was very much a we can burn all the money we want and somehow we're going to improve care. And I think they've Discovered that they might as well just be pouring gasoline on on the fire because that that money is burning and care hasn't improved. So it's yeah again, I think it's kind of this tech bro approach of I think we could fix it if we throw enough money at it. They're discovering you can't.

Speaker 2: 18:55

Yeah, it feels like too a lot of them are more are taking the retail mentality and the focus to Matt's point on the primary care side and also telehealth, wearables. You know that sort of focus where in their minds in the retail world it's I paid X to produce this product, I'm going to charge Y to incur the margin on selling that product. Knowing that healthcare, none of them tackled the nut of payer reimbursement. We're not a X cost equals Y margin. Financial industry it feels like a lot. Maybe did not appreciate that. We've talked a lot, aaron. What? Amazon, best Buy, you name it. It feels like we've. If there's a retail shop, we've mentioned it Walgreens, et cetera.

Speaker 1: 19:45

I'm half expecting Piggly Wiggly to wade into the game.

Speaker 3: 19:52

That'd be great you know, grocery and diabetes management kind of goes together right, yeah, lifestyle change.

Speaker 2: 19:57

But even I'm curious too, like Amazon, you know, their chief medical officer announced he's leaving. He's been there from the get-go, and usually that spurs further news by an organization, and usually that spurs further news by an organization, and so I'm really curious where Amazon Clinic goes, which, of course, put a ton of money. I think they even revamped what they were calling their health initiative Right. And so I don't know, matt, if you, if you're thinking too, is it almost feels like we're going to have a pause, maybe, and then a rebirth for the third time of what retail disruption actually looks like.

Speaker 3: 20:45

Right, and I think you know the walk-in clinics, the minute clinics right, they're probably using some of that service as the loss leader to drive bodies through their doors at the retail clinic. But they also own the payer side too, right? So having that insurance piece tied into it. Of course, all those people aren't insured with Aetna, right, but the people that are insured on an Aetna plan that do get their care through the doors of a local CVS minute clinic, there's a lot of to your point about the reimbursement. There's a lot of levers that get moved behind the scenes, right. And when you're controlling the payer and the care provider and also the retail facility all in one, that model seems like it might be sustainable or it might be marginally effective, but also, I just haven't really heard much negativity about it. So it does lend me to believe that when you control the payer side of things, then you might be able to do a little bit more disrupting or more impact in local communities. That's a good point.

Speaker 1: 21:58

Let's take a quick timeout, we'll be right back.

Speaker 4: 22:02

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Speaker 2: 22:27

Visit shplccom for details. Read more news recently. Who's at Walgreens and LabCorp? You know you can go where a lot of employers are sending folks to LabCorp. You can go, use the LabCorp and Walgreens obviously to go do your initial drug screening. And so the theory being, from Walgreens' perspective, we get them in the door, then they're going to have to buy something. We're Walgreens, there's, you know, there's magazines, there's whatever you got to buy more prescriptions. And so to your point maybe it's not the health industry, it's just foot traffic in the door. You know Disney approach. They're going to ride a ride and first place you walk through as you get off the ride is into what A retail shop to buy the products, right? So maybe that's actually a good point. Yeah, cvs, walgreens who'd have thought that? Maybe not necessarily a and standalone product line, but just a feeder mechanism into the retail place right and that, and that still applies with kind of the walmart of the best buy model.

Speaker 3: 23:24

But the problem is that they don't have that payer piece of the puzzle right. They they're not tied in directly with a specific insurance company. So I think that's what rounds out CVS's position, right now at least, is because of that integration with, you know, not only the PBM side of CVS Caremark but also with the insurance side, being Aetna's health insurance the small employer at the individual level and the mega employer level. So they're really tied into all aspects of it.

Speaker 2: 24:02

Good point, good point. All right, let's maybe pivot a little bit here. We touched on the last time you were on, which has been about six months, a little bit on direct primary care and movements that it may or may not cause in the market. Here, at least in South Georgia. We hear a little bit of it, some rumblings, but you don't hear much about it beyond that. But I'm sure you live in it much more than we do. Touch a little bit about what maybe you're seeing in that market. If anything, have you seen as much movement maybe in these last several months?

Speaker 3: 24:42

Yeah, we've been talking about this for what feels like years, that's right. You know the DPC or the MD VIP model or the concierge doctor model and I think as a consumer, I love the idea, especially as regular health care kind of progresses. Going back to my little tangent about, you know, seeing a primary care physician, maybe only having five or seven minutes of their time for that visit, or maybe having to wait three months for a sick visit because of how overbooked they are, from a patient side, everyone wants the direct primary care model to actually work. When you, when you think about it at the consumer level, because you want that old school interaction with your physician, you know what existed 20, 30 years ago. See, see my doctor here, call them up if I have a problem, have them run by the house If I have something going on with someone in my family. Just more of a friendly interaction, care interaction and really trying to do the best for you in that moment, no matter whether that moment is a one-minute text message or a 50-minute office visit. So I love the concept of it.

Speaker 3: 26:10

The challenges kind of relate to talking about Walmart and Amazon. Healthcare is complicated, right. So you can solve the care side by having this direct primary care arrangement where now you do have a doctor on call per se for you or maybe your family members. But if you don't solve the payer side of the equation, then it makes it really challenging for that to grow at scale. So the challenges that we run into is obviously none of the major insurance companies are going to have a plan set up where you can coordinate direct primary care and have it either come out of your plan dollars or reduce your premium because you have a direct primary care physician. So that won't exist in that model until the large insurance companies figure out a way to kind of integrate that. There's plenty of other alternative non-traditional plans that have different strategies and approaches that they would implement to help employers save money, but not many of those have the ability to actually reduce their stop loss premiums if you implement direct primary care.

Speaker 3: 27:26

So I do think that that is a bigger trend in that kind of non-traditional market. You're starting to see a lot of these third-party administrators and stop-loss companies work together to kind of come up with what they would call maybe a bundled type plan arrangement where hey, if you implement direct primary care, we'll reduce your stop-loss premium X or we'll carve out claims Y. Here that would have been going, you know, to a network primary care doctor and now it's going to direct primary care. So I think we still have a lot of work to do in our industry to make that easier, because an employer doesn't want complicated, employees don't want complicated either. So you know there's so many different components to that, the challenges that I kind of see that limit that model is scale right.

Speaker 3: 28:18

So these direct primary cares are taken on maybe 600 to 800 patients.

Speaker 3: 28:24

So the only way that you increase scale is you have more DPC physicians come into the market or you ask that DPC to go from six and 800 to a thousand or 1200.

Speaker 3: 28:36

And now you lose that appeal of being able to really spend time with the patient, like what we're all looking for. And then the other piece of that is having that insurance integration right Without having the scale or without having the insurance integration right. Without having the scale or without having the insurance integration, it's kind of two forces kind of bumping up against each other. And I think the adopters of it right now are maybe a small business that is able to integrate that and reduce those premiums, or a private payer just saying, look, I just want a DPC on on my own, I'm just paying for it, I don't care what my plan does. Or a business that's located in a geographical area where there are a lot of direct primary care providers, right, and then you can implement this strategy to a larger employer and also have the ability for your employees to be able to kind of pick their DPC right. We're not just shoving you to one direct primary care provider, we're giving you the option of being able to pick from maybe 10 within this geographical location.

Speaker 1: 29:39

Mentioned it on the podcast before. My PCP is a DPC and I switched to her. A year ago I had a big health thing occur and I called up my PCP which is in my plan and they're part of a big network, all that stuff and I had a medication question after I'd been discharged from the hospital and I was told well, you have to see the doctor first after being discharged before I answer any medication questions. I answer any medication questions and I said, okay, can you see me tomorrow? Like when can you see me? This is a pretty urgent situation and I'm like well, the earliest we have is May 15th. It was April 8th when I asked that question and I said, okay, that's it, I'm switching to a DPC, that's it, I'm switching to a DPC. Not only did she onboard me within 24 hours, but she was able to answer my medication questions.

Speaker 1: 30:36

Now, ultimately, I ended up going back to the hospital. That's a whole other story, but she was there kind of the whole way and has been there through my recovery the whole way too. I could text her, I can text her on weekends and she's going to respond to me, but it is one of those things. It's like it's it's an additional several hundred dollars a month for my family In addition to the insurance that I already pay for. It doesn't go towards any of my deductible. Yeah, so now I've effectively increased my own cost of care, but I'm actually using my insurance less and there's no reward for me to do that and I'm taking a burden off the insurance company and I don't see any of that return. Now I do it because I need access to care right now and so it's worth it ultimately for me to do that, for me to do that.

Speaker 1: 31:31

But I think you raised some really valid points of it discourages DPC use, by the way that we have it set up with the insurance companies today, and I know of three DPCs in my immediate city, which is rare for a city my size of about 30,000 people. We have three and I think all of Savannah has like three and they're 10 times our size. But If there was a way for us, as consumers of insurance and medicine, to have a more fair system, where maybe I want to have our cake and eat it too. But you highlight some huge weaknesses and drawbacks that we certainly feel and it almost feels like it's intentionally set up that way to discourage us from DPC, but it certainly feels like that's the way to getting access to care is through that DPC model. If you can afford it, we're blessed that we can. So I guess kind of where I'm going with.

Speaker 1: 32:32

All this is, then, why we are driven the way that we're driven. These insurance companies, they're driven by their metrics. They look at the direct primary care model as not being measurable, because it's not that efficiency right. If the doctor needs to text me on the weekend, she does so. Or she spends 50 minutes with me when it should have been a 15-minute appointment because she's actually providing care that flies in the face of insurance metrics. So let's kind of talk about that. And how, how is that driving both employers and insurances towards, towards this rush to the bottom and, if we want to call it that, yeah, absolutely.

Speaker 3: 33:17

I think the metrics are just going to get more and more important and I know that you guys deal with a lot of this kind of on the Medicare payer side. I know that there's a lot of value-based care types of situations. I'm sure I'm fumbling up the terminology because I don't deal with it every day but I think that one of the approaches that these again, non-traditional third-party administrative companies are taking is more care being steered, if possible, to high-value or high-quality care practitioners. And it's challenging because, going back to your point, aaron, I had the same type of interaction with my primary care. So I feel like there's a lot of grassroots marketing being done for direct primary cares just through those kind of experiences of, hey, I haven't been able to see my doctor. I rarely get sick, but the one time I do get sick I can't see my doctor for almost three months. I love my primary care, but he just can't see me, right? So now I'm going to go see another primary care within that organization. I spend literally five minutes with them. I get prescribed a medication, I get prescribed a second medication to deal with the side effects of the first medication. All in from check-in to exit was 17 minutes, which most people would be like, super pumped about. Hey, I had a really quick doctor's appointment but I actually needed some attention and it didn't. It didn't happen, right? Um, so you know that those experiences will drive me towards direct primary care and, just like it, kind of drove you and I think that that'll continue to happen in the market and that's just going to be a very long way of getting that model to become more and more popular.

Speaker 3: 35:12

But, getting back to the kind of the metric side of things, what we're seeing is this whole health care steerage. Access to care, finding care, is so complicated that what we all do is, anytime that you need some type of care, how do we figure out what doctor we're going to go see? We typically ask our friends, right? Hey, who did your back surgery, or who did your shoulder surgery or your knee surgery, or who'd you see for your migraines? Right, and we're getting, you know, we're getting advice from one of our friends. Obviously we trust them, or trust their opinion, or maybe someone else in our social network, right? But we really have no idea. Was that care quality right? Like, did it actually address the? You know the situation? Was it the right standard of care, was it the right treatment protocol? And, frankly, it's very complicated to even figure out how we kind of critique or measure physicians in that world. So that is an innovation that I'm really excited about, kind of in the third party market and also the care navigation market, is being able to give consumers, give employees, the tools and resources to be able to actually find quality physicians for the types of care that they might specifically need.

Speaker 3: 36:41

And I was at a conference on just a week ago and I had a kind of a a weird light bulb moment, but also a scratch your head moment, because in these conferences you have a speaker comes in, they talk for about an hour. You either move to a different room with a different speaker or a new speaker comes in and back to back. My sessions were direct contracting was the first session and talking about how great direct contracting is and how it's the wave of the future for health plans. Into the second session was care navigation. Direct contracting is flawed because how do you know that the direct contracts that you're creating are actually with quality care providers, right? So, for instance, if you have to have three surgeries, even if they're a quarter of the price, but you had to have it three times. You're really costing your plan money by having direct contracts with that particular provider versus giving your employees the tools to actually see you know the best or the top five provider for that particular situation.

Speaker 3: 37:53

And one thing that was kind of eye-opening to me is you know, you look at some of these centers of excellence. You know the tools exist to show what might be the top facility for you to go to, but the tools that are coming and that do exist today but are going to become more mainstream, are the tools showing specifically what physician within that facility is the one that you need to see and what facility is the one that you're going to get the best outcome for that particular care episode. So you know, taking an orthopedic group right, there's going to be people that are super specialized in one particular type of procedure. Of course they can do all types of procedures right, but you want to make sure that the doctor that you're using is the one that is really super specialized for that particular situation that you need. So if you just look at the organization as a whole, yeah, they've got great outcomes for ABC procedure, but the doctor that might actually be doing ABC procedure on, you might be the worst doctor within that facility to do that procedure right. So you think you're going to a quality provider and as a whole they might meet those metrics, but at the provider level they might be falling below that metric and you really have no idea.

Speaker 3: 39:12

And then the second piece of that puzzle is how do we steer care to the highest quality facility? So so again, that orthopedic surgeon, they might be able to perform that care in 15 different hospital settings or five different ambulatory surgery centers. Well, their actual quality outcome metric, so your readmission rate or your success rate for that particular procedure, that could actually vary by location as well. So they might be really great when it's done at one particular ASC versus when it's done at the best hospital system in your area. So those are the kind of things that really excite me, because I go back to that anecdotal story about well, how did you know which back surgeon to go to or which doctor to go to?

Speaker 3: 40:06

It's word of mouth, right, there's really no value in it other than, hey, a buddy of mine had this done. Um, I think empowering people with the tools to be able to find those quality care physicians is going to become more important in the health insurance market and I think, as that becomes more important, it's going to be really paramount for those provider groups to make sure that they are keeping up with their metrics so that, as 10 years from now, when employers are steering people to this clinic for this type of care, how is that provider group going to compete with that clinic to earn that piece of that market share? There's a long way to go for that, but I do see that as being an exciting piece of the business and also something that providers should be considering when they're either doing these direct contracting situations or also just keeping track of their own metrics for readmissions, resurgery situations, follow-up care, complications and stuff like that.

Speaker 1: 41:14

Well, I don't know about our listeners, but I solely rely on using Yelp to pick all of my providers for my really important surgeries. That's the number one way that I pick a restaurant. Why not my care Right?

Speaker 2: 41:29

Shout out to Yelp. I know we're coming up on time, but I'm interested to get your thoughts on this. Matt and I'm going to do what we do very well and I'm going to completely just pivot to another talking point. It's still tied to holding different parties accountable. So earlier this year we had a lawsuit filed against Johnson Johnson kind of piggybacking the ERISA health plan and the amendment from the Consolidations Act of back in 21 that had to deal with. A lot more kind of transparency is how I take that sort of amendment in terms of cost and pricing and such. Speak to that a little bit more. You obviously live in that much more than we do, but I found that intriguing as something that should maybe shake things up a little bit. Speak to what that brought up this year and how maybe that impacts some of our listeners.

Speaker 3: 42:20

Yeah, this is a classic case of good intentions perhaps gone bad with legislation. I think on the surface everyone agrees that the Consolidated Appropriations Act was a good thing. It had the price transparency pieces to it where hospitals have to post their prices. It had compensation disclosures so we as as uh brokers, agents, consultants, whatever you want to call it we have to disclose our compensation to our clients. It had gag clause language in it so that, um, you know, whoever you're using from an insurance company or some type of third-party service provider or PBM, they have to make sure that they don't have gag clauses in their policy.

Speaker 3: 43:07

But it also comes with this fiduciary responsibility piece and the main industry kind of points and references going back to how fiduciary responsibility really shook up the 401k market, you know, over a decade ago. So I never have been on the financial planning side of things, but obviously the same type of regulation or similar regulation was introduced to 401k plans and it did change a lot of the fee model and service model and stuff like that. So I've been trying to kind of find that correlation to what what it actually positively impacts when it relates to health care and all the various providers within the healthcare model, but I will say the one correlation is the, the main attorney that made hay on all of the fiduciary lawsuits during the 401k market disruption is now going after the healthcare market disruption. So forgive me because I'm going to blank on his name, but he was solely responsible for over like $2 billion of the $6 billion lawsuits that were in that 401k market. So now we're talking about health care, which everyone is involved with. It's a much larger market, there's a lot more money out there, but and I do think that these lawsuits, like the J&J lawsuit and there's been many others, are going to come about J&J lawsuit and there's been many others, are going to come about and what it really boils down to is is your employer being fiduciarily responsible with your money?

Speaker 3: 44:46

As an employer, you are picking a health plan for your employees. Is that health plan in the best interest of your employees and are you paying for your care in the best way shape possible, which I think we can all agree that there's a lot of fluff and there's a there's a lot of overspend on the commercial payer side, whereas you know some payers might pay 600% of Medicare for certain things which we would agree. Hey, that's probably not responsible and you're not doing your plan members service by paying that much for that particular procedure. The problem is you don't really know about it as an employee or as a member of that policy, you don't really see how egregious some of these reimbursements are. And that's what these lawsuits are kind of uncovering is you've got employees that are suing their employer because they are the fiduciary for the plan and then you also have plans, like the Kraft lawsuit, that are suing the actual insurance company, so the insurance company not being a fiduciary by providing claims data and other types of analytics to the actual employer. So I think it's going to be a hot button.

Speaker 3: 46:08

I think there's going to be a lot of money that will change hands, whether it's from an employer to a class action or whether it's from an insurance company to either a direct employer or another class action. But it's definitely the new thing and I think we can all agree that when every billboard that you see is related to some type of accident attorney, it'll be interesting to see how that translates to the healthcare world Because, again, people don't have car accidents every day, but people use their health insurance just about every single day. So there's going to be an abundance of opportunity for attorneys to make money in this market, and I guarantee you they're already looking at the way that they can kind of create their own niche and figure out what type of either business or what type of insurance company they can target and have a competitive advantage over, and once they understand how that works, it's just going to be wash, rinse and repeat and they're going to try and extrapolate as much money out of the market as they can. So it's very important for employers to be thinking about this, because the potential of a lawsuit is unfortunately probable.

Speaker 3: 47:25

The challenge is, as a small employer going back to kind of the market that we work in, there's not a lot you can do to really make sure that your plan doesn't have these gag clauses, to make sure that your plan is being fiduciarily responsible, to make sure that you're getting the data that you need out of either the plan or the PBM or whatever it is. So it's scary, but it's scary because I don't think small employers are going to be able to really manage it very well and I hope that this doesn't end up being a main way that they lose money through litigation. So these are things that we're kind of working on but also not having all the answers and having to rely on some of these third parties and the insurance companies to really help make this be transparent for the employer and the employees. Those are the big challenges that concern me.

Speaker 1: 48:26

Wow, that's certainly something to think about and be aware of as the market continues to shape and evolve. Well, matt, we are actually well past time. First off, thank you for joining us today. Wonderful conversation as always, and, honestly, we could probably go another hour and still not cover everything that we want to cover. So when I introduced you as an expert, I hope people understand why I say that, because your knowledge and your breadth of knowledge on this is phenomenal. So thank you for being on the show with us today.

Speaker 3: 49:07

Well, I appreciate those comments and I really do love this opportunity because you two bring a unique perspective given the type of business that you're in. You two bring a unique perspective given the type of business that you're in, and it's one that I don't completely understand, you know, because it is so complicated and just as much as you may think of me as an expert, you know the feeling's mutual from across the table. So, like I said, I love the opportunity to talk with you all and chat with you all, and I agree, I could go on for another hour, I'm sure, and I could learn so much more from you all as well. So thank you for having me.

Speaker 1: 49:44

Yeah well, thank you for joining us. This has been an episode of Beyond the Stethoscope Vital Conversations with SHP. If you enjoyed this podcast, please be sure to rate and share it with your friends. It sure helps the show.

Speaker 2: 50:00

Production and editing by Nala Weed. Social media by Jeremy Miller.

Speaker 1: 50:05

And our co-hosts are me, aaron C Higgins and Jason Crosby. Our show producers are Mike Scribner and John Crew.

Speaker 2: 50:13

Thank you for listening and we'll see you next time.

Speaker 1: 50:16

Thank you for listening and we'll see you next time. Now, before we go, there is one final question that I'm sure our audience just is dying to know Are?

Speaker 3: 50:33

you a beach vacation guy or a mountain cabin vacation guy?

Speaker 1: 50:39

I'm a beach vacation guy. That doesn't have anything to do with being near the beach. Or did you move here because you're near the beach?

Speaker 3: 50:44

So I grew up on the beach, so I should be the mountain vacation guy right, Because I should have had enough beach time. But there's just something about a good breeze, a nice beach chair and the sound of the ocean waves. I don't know if I can get any more relaxing than that, so that's what I like that sounds fair.

Speaker 1: 51:06

That sounds fair, alrighty. Thank you again, matt. All right, thank y'all.