Benefits with Friends | Paul “Joey” Stone | Benefit Decisions
There are Five main segments to health CARE and health INSURANCE. Those Five segments are riddled with misaligned incentives and hidden profits for insurers, pharmacy brokers, and the health care systems.
The American Healthcare Consumer must be aware of the pitfalls and possibilities that exist within their plans. Informed consumers are seeking aligned partnerships with TPA’s, PBM’s, and Population Health Companies and achieving remarkable results with the help of a new breed of benefit specialist that sells more than insurance.
Lou and Paul will discuss these and other solutions that are helping plan sponsors change the trajectory of health care and insurance costs, allowing these employers and their members to reach new heights.

Listen to the episode here


Don’t Wait Until It’s Too Late: Five Critical Questions For Smarter Benefit Decisions With Paul “Joey” Stone

This is a new season of the show. I have a great guest bringing into the room, Paul Joey Stone. I think it’s the third. That’s how much I love this man. Welcome to 2024. Lots happened since we did our last show. Sometime in the fourth quarter of 2023, then renewal’s got busy and the world got a little bit busy as well. Welcome back, Paul. For those of you that don’t know him, he’s the VP of Business Development at Apta Health. If you want to introduce yourself and do you want to add anything to that?

That’s what I am. I had many years experience as a consultant running a bunch of agencies. Apta was one of the preferred solutions for me for a lot of my clients. I liked it. I love the firm. I love the people, which is important as you all know, the work with quality folks and here I am. I’ve been here for a few years.

That’s crazy that between the two of us, there’s over 60 years of experience.

We love what we do.

Paul and I have known each other for several years. We’re involved in a lot of different industry, healthcare and health insurance world organizations. We’ve met each other several times at conferences. I attempted one time to work out with Paul and Dorell. That was interesting. It was fun fir you folks. You folks work out.

You did great. It was awesome. I was impressed. That was an uncomfortable plane ride home. I was a little sore but anyway. Thanks again for joining me. When we spoke last, I said, “I’m starting off a new season.” You jumped at the chance to be in a guest. We’re going to do a little bit different format. The shows are going to be shorter.

One thing I talk about all the time, connected with a lot of HR leaders out there. They don’t have time. It’s not something that they have a lot of. I want to use this format to help elevate their understanding of what’s happening in healthcare and health insurance and how it affects their company, their people, and the bottom line, their ability to excel at what they do. Health insurance, for a lot of companies, is this unnecessary or this necessary evil.

This is a second or third largest item on the balance sheet. It’s treated probably most of the time, if business leaders were being honest. They treat it as a non-negotiable expense. They’ve thrown in the white flag. It feels like death taxes and insurance premium increases are certainties. The C-suite has walked away from the conversation in many cases because there was no data for them to sink their teeth into and they dumped it on HR leaders.

It feels right there because HR leaders are great at people. They know. They have the heartbeat of their people, but health insurance is very complex. Health care is very complex. Manage care made certain of that. The process that most companies go through with their insurances, they go through open enrollment, renewal time, and shut the book. It’s set it and forget it and wait another 9 or 10 months. Wait for their benefit, experts, their partners, their broker, their consultants, or their insurance carrier. Whoever they might be to deliver this insurance renewal.

One of the things that we’re passionate about and I know you are too, is we want to change the mindset from thinking about renewing an insurance plan to finding the best way to finance the high-quality health care for your employees. According to Kaiser, “When you blend individuals and families and everything in between, the average employee premium is about $15,000 per year” Underperson company is paying on average $1.5 million. I know in the Northeast, it seems like it’s a lot more than that. You’re closer to $2 million.

There’s a certain blend of how many singles, how many couples, and how many families. Businesses are paying a load of money for an inferior product. We know that. You and I know that. That’s what Apta is all about but I don’t think that the business leaders know that. They don’t have the time to invest like we do into what’s going on with healthcare. How are insurance companies artificially inflating prices? The narrative is and the mindset is, I buy insurance from insurance carriers because I’m getting discounts.

They’re negotiating. You laugh. It’s hard to swallow when you realize you’re the expert and you see the real prices. We have access to a ton of information and I’ll invite anybody that’s reading, give me a call or email me. I’ll show you the numbers. I’ll show you that the cash price very often is the lowest price. How much insurance companies are artificially inflating with your premium dollars?

With your claims, they are paying top dollar for health insurance. The reason for the episode and you’re going to help me with this, is to elevate and to reset the expectation of the benefit decision makers. I’m titling this show and maybe every show, five questions every HR leader should be asking. Go back, take these questions back to your current partners and internalize them.

The decision-makers need to be very cognizant and get assistance. They shouldn’t try to do it on their own. There are all kinds of people out there who can help. Share on X

Some of them are something that you might be a want to ask yourself. I want to start it by this and we got about twenty minutes. In my mind health care and health insurance have evolved since the inception of managed care dramatically. Please add everything in. In the early days when managed care, I was a young insurance broker and prime on my life selling guardian and chub indemnity products. Along came US health care hip. All these managed care HMO companies.

No one knew what they were. No one understood them. These directories, which at the time were printed and I had to walk through New York City with these directories. Managed care promised a lot to the consumer and it was complicated but the consumer said, “We like this idea.” These companies are getting discounts on behalf of their members. Sounds familiar? That’s what it was.

This came down and no longer did you have to pay a deductible, which at the time was about $250 or $500. You could pay a $0, $2, $5, or $10 copay. You go to the doctor and no questions asked. At the time, you probably needed a referral. Maybe keeping things of that. That’s what set the tone for the consumer. This is good for me. I see the numbers. My premiums came down. I’m getting discounts. I’m going to go through the pain because there was pain of understanding these new plans. Maybe even changing doctors. This is going to work for us because it’s going to help control our costs. That sounds pretty familiar. Do you want to add anything to that?

It’s funny how things in a lot of aspects of life go full circle. We went from deductibles and basically co-insurance, covering catastrophic things. Everybody thought that they should be able to go see their doctor for very low copay. That’s not insurance. You don’t get insurance for your full changes. Anyway, it’s funny how things go full circle, but I agree 100%.

It started the process. I use this word very deliberate, of grooming the consumer. My managed care company, whoever that might be, is helping me control the cost of healthcare. On the other side of that, while that’s happening, the healthcare system, which we’re now accepting lower fees for the ability to see the members of these managed care companies. They were getting $0.40 or $0.50 or $0.60, let’s say. Most health care providers, the facilities, the hospitals, and the doctors were independent. They didn’t have a leg to stand on.

They had to take it or not see their patients. They accepted it. They signed the contract but the large facilities, the hospitals got together and said, “This is hurting our bottom line. We are literally making 40% less. What could we do about it?” Business being business and capitalism being capitalism, those hospital executives got together and said, “Let’s start merging. We need leverage. We need to control more market share so that these localized HMOs can’t push that around.” Most of them were very local at the time.

We need some strength in numbers now. Hospitals started merging with each other. That started working. You look now, the largest healthcare system in the country has over a hundred hospitals. It’s in California. I forget the name of it because I’m here on the East Coast. Northwell, which at one time was North Shore Hospital, had two locations, Long Island Jewish Hospital at one and all these other hospitals.

They’re now up to 30 plus hospitals in New York. That’s the largest employer in the country. That leverage gave them some bargaining power and prices started coming up. They’re allowable rates. Their negotiated rates started to increase and they did something brilliant. They started to realize that if we merge horizontally. It was vertically. What about the labs? What about the radiologists. What about that?

How about all the docs?

All the way down to the lowest one on the totem pole, those poor primary care doctors. Now they own that and the importance of that. If you’re a consumer and you think about this, you need to think about it. You’re a consumer. Your doctor is now owned by your healthcare system. It doesn’t have much say, but they promise him less headache, less out-of-pocket cost and less aggravation of running the office. Immediately by signing that contract, you’re getting the rates, the reimbursable rates of the health care system now. They’re negotiating for you but they got a lot less than they bargained for because they’re game is pretty miserable because they have to see a patient every seven minutes. It’s insane.

I’m going to mention quick, they almost demand that they make a certain number referrals into the hospital system.

They don’t have any control anymore. If you think about it, not that not that long ago, whenever your doctor thinks whoever the viewer is, was independent. They had other Dr. friends. They could refer you to relationships that they had. Maybe there was a kickback. Maybe there wasn’t. Maybe doctors are great person.

I believe doctors are great people. Nurses are great people. I’m married to one but it is a business. The point is, they had control and now they don’t have control. To your point, on average you get about seven minutes with a doctor and that’s not health care. There’s a lot of alternatives to that. We’ll talk about things on other shows direct primary care and things of that nature, but the consumer needs to be conscious that health insurance world is massive. The health care world is massive.

This managed care networks are both of them are trying to maximize their profits off of you. They have private equity investors, shareholders, Wall Street, stock market and dividends to meet. They have to maximize profits. On the health insurance world, by the way, there was a time when your insurance carrier was your insurance carrier. The model is, without naming names, your insurance company is part of a sister, an umbrella of controlled companies that probably includes a pharmacy benefit manager, which is the broker for medications.

Probably includes a health care division, which in one case is the largest employer of doctors in the entire country. They probably have a data entity where they control all the data so that they share it amongst themselves and try not to share it as much as they can with their members and their plan sponsors. The money that you’re giving to your insurance company in one hand, they’re handing off to their partnerships on the other.

They’re not getting in the pharmacy business to bring prices down and create value for the patient or the member or the plan sponsor. They’re not buying doctors so that they can, “We’re going to bring the top doctors with the highest quality and we’re going to drop the price.” No, they pay themselves top dollar.

A lot of those, whatever you want to call them, margins and things like that in the vertical integration don’t necessarily fall into the MLR, the loss ratio. They’re making monies over here that no one sees and just backing up just a little bit. The problem when you have C-suite folks who don’t like looking at the spend on the health care side of things. There are plenty of smarter enough to figure it out but because they’ve been denied this data, it’s cooked in this veil of secrecy, if you will, which makes it seem even more complicated.

They muddy the waters to make it seem more complicated than it is. A good example, I had a CEO many years ago. They were fully insured and 600 employees. Basically, talking to her, I said like, “If you’ll take a little bit of time, we can sit down and I can get you what you need to know to make good decisions as it relates to this stuff.”

She’s smart. It only took her like two hours to like, “I got it. I understand now how we can restructure.” We ended up moving to self-funded and they save a million dollars. I’m not saying that’s a solution for everyone. I’m saying a C-suite person finally stopped saying, “I’m not going to look at the veil over all of my data. I’m going to find out and get educated more about how to fix that.” They did.

That’s the point. The point is power and knowledge. We want to arm people with the knowledge that they need to then understand the questions that they should be asking and see. We’re lifting the hood. We’re pulling back the curtain and saying, “here’s how it’s worked. This is what we know. This is completely undisputed.”

The data is available now. We can show you the prices. We can show you what your insurance company pays for that service versus another insurance company or what the cash price may be. The important thing to understand here is that you have these two behemoth entities, which by the way, are the two largest lobbying entities in the country.

Nothing is happening in the White House other than, and I’ll applaud them for this because this wasn’t easy to do, the transparency legislation. That brings us to the next point, transparency or lack thereof. Managed care has built its profits. It’s enormous footprint based on the intentional or the deliberate intent to keep the actionable data from the consumer. That’s how they get away with everything. You’re insurance broker, which I’ve been for many years. I was a general agent for 25. I’ve had my own agency for 27 years. I sold insurance. That’s all you could see.

We believed the narrative. It made sense to us. Why would insurance companies want to overpay, presuming that’s the way they made profits? It turns out MLR, which is mentioned earlier, a huge flaw in the Affordable Care Act. I don’t think anybody would deny that at this point. Basically, changes the math so that your insurance carrier maximizes profits by paying higher claims that justify higher premiums and that 1% profit that they make off of their premium goes up the more premiums they charge.

They can only justify that by higher claims. All of the detail is hidden in the claims data, which is I know what Apta is great at. Charity like that with the consumer. Now let’s talk about the plan sponsor. They’ve been groomed to believe they’re buying insurance. They don’t give themselves much time, because no one wants to do this. They’re very uncomfortable. This is not an area of expertise for most companies. If they’re being honest, they rely very heavily on their brokers who are good people and there’s some great brokers out there.

 In some cases, I’ve had brokers say, “I know what you’re saying, Lou. I can’t bring up this conversation with my customer because they’re not asking me for it.” They’re not giving me the time to talk to them about it. This is something that it’s imperative that the consumer elevate their understanding so that they can reset their expectations. I’m involved with Health Rosetta and I know you know a lot of Health Rosetta solution partners and advisors. They’re doing amazing things.

It’s insane. We had the Rose Award Winner, Oradell, who reduced their claim spend by 25%. Having increased contributions or out of pocket cost in four years as a result and expanded their benefits. That’s the dividend. That’s one of the things that employers have to understand is this is an expense. This is something on your balance sheet that’s probably gone unmanaged for a very long time and it’s grown significantly.

Look at that now. Whatever that number is, if you’re an HR person, go ask the CFO. What did we spend on health insurance last year? Whatever that number is, think of 25%. That’s potentially what you’re overspending. You’re a self-funded solution. As a benefits advisor, what I would say that’s going to be your most comprehensive solution because it gives you the most control over your plan document, your claims payments and your net pharmacy cost.

One thing that I know you’re passionate about is the resources that you can give your members to make informed health care decisions. Something that’s one of the biggest surprises, frankly, that we got out of this new approach and the plans that we’ve been implemented has been the impact on the members of what I’ll call the anchored nurses, the care coordinators. The most trusted profession in the world.

Strangely enough, it’s very funny when we’ve implemented these plans. and the members get a call, an inbound call from the anchor nurse introducing themselves, Nurse Sam, Nurse Angela and a couple of the cases we worked at. Amazing people. It almost feels like a spam call. This has not happened before. They haven’t got any call from their insurance carrier. To expand on that, what has been your experience with that aspect of the plans?

If you think about it, for you out there reading, if you had a pretty complex medical situation diagnosis or whatever and you have to go out there with your doctor’s help. You don’t know incentives and things like that with them. You have to figure this out on your own and even when you do take direction from a doctor, he or she is telling you, “You should go here and you should have that done at all.” In the back of your mind, you’re still probably questioning like, “Is this the right thing? Do I need a second opinion?” Especially if it’s pretty significant.

When you can get a care guide, a nurse, or someone who knows how to navigate health care. They do this every day. They understand how to do it. They understand how to make you feel very comfortable with your decisions. With a lot of our solutions, they’re talking to the provider as much as they are the member. They’re working with both the provider and the member to balance out and find the very best care at the very best price. The member experience is great, too. We talk about this all the time. It’s like, if you’re offering the benefits, health insurance being one of them. It should be a benefit.

Benefits with Friends | Paul “Joey” Stone | Benefit Decisions
Benefit Decisions: If you’re offering benefits, health insurance being one of them, it has to be a benefit. It shouldn’t feel like a nuisance or hassle to your employees.


It should feel like a benefit.

It shouldn’t feel like a nuisance or a hassle to your employees. When you have the ability to put someone who knows how to navigate health care, whether it’s a nurse or a care guide, alongside a member. Before their health care journey gets too far down the road before it’s too late, and you start to help them make those decisions. It makes all the difference in the world from a cost and quality standpoint and a member experience standpoint.

It helps avoid unnecessary care.

All the time.

Duplicate care. Doctors ordering tests that have already been done by another doctor. Conflict and care. Medications that have such a low effectiveness. There’s a better term than that but there’s medications that are the most prescribed medications in their therapeutic class, but have such a low efficacy.

It’s so funny because like we have a whole team of people. Please understand, I’m not trying to sell our solution. I’m just saying they are available. We have a team of folks that make outreach calls to the physicians who have people on those type of drugs that are more expensive or less effective. The efficacy is not as good. We had conversations with the physician about, “You’ve got boo on this drug and it’s $850 a month,” let’s say. “Mr. Doctor and Mrs. Doctor, we have these three drugs that the efficacy is better or the same or better, you can see. Here’s the clinical studies. They’re $14, $17 and $22 a month. Can we make the switch?”

You wouldn’t. There’s so much money out there with that type of solution to it that’s simple. The doctor says, 9 times out 10, “I didn’t know that drug that was prescribed was that expensive.” It’s not their job to know how much drugs costs. Their job is to know which drugs work then they’ll make the switch very often. More often than you would imagine.

Going back to my point before, doctors are good people. They study medicine for a certain reason. I’m hoping. They made a decision when they were pretty young but they should be fairly compensated and they should be compensated even better when they are truly the best. Not because of a certain logo on their building. They don’t have the time. When you talk about the cost of a medication, it’s almost like a question. There is no cost. The cost is what the entity that you’re working with is willing to pay for it. Johnson and Johnson, for example, is finding out the hard way. You probably shouldn’t pay $1,500 a month for medications that are $65.

That’s a great point. We did a webinar on that very topic. We had Julie from Berger Montague right in the middle of that suit and it’s crazy. From the healthcare buyer that this is intended for, think about the financial fiduciary responsibilities because of things like that. That’s what the suit’s all about.

Plan sponsors and HR. I was talking to someone and I said, “We want to have this fiduciary conversation with plan sponsors because they are fiduciary.” They come to us. Our clients lean on us a lot for things like Cobra, HIPAA and at risk type things. The notices for their employees. There’s dozens of responsibilities that most employers aren’t even aware of because no one’s having this conversation with them.

They don’t hire outside HR consultants in most cases. They’re supposed to be the experts. Department of Labor is not sending you a postcard saying, “Your filing for this is due.” There’s exposure and risk. There’s a monetary risk to that employers should be aware of. A lot of our clients, we’ve gotten over the years because we’ve helped them with things like the ACA, the 1094 and 1095 forms that they weren’t aware of. Now, talk about what is the role of your benefits advisor? Are you buying insurance for them, or are you leaning on them for guidance and support and to help you fulfill your fiduciary responsibilities?

On that point fiduciary because it’s heated up, this conversation. The CAA, the Consolidated Appropriations Act, a lot of the transparency legislation, the GAG order attestation, and the RX reporting compensation disclosures. They’ve been throwing stuff at employer plan sponsors like crazy. An HR leader might be sitting there saying, “My insurance company is doing that for me.” Are they? Why are they? When I have this conversation, I’d love to hear your thoughts about this. It’s about after the checkbox, is the way I look at it. We’ve all seen that grid of here’s your compliance responsibilities. Here’s the law. Here’s the due date. This is the size employer. It impacts and this is what you need to do in order to stay compliant to avoid this penalty. This legislation to me is different than those.

It is. I agree.

You want to comply but then you have to ask yourself, “Why is this law out there? What opportunity and information is this meant to unleash on the American healthcare consumer so that they can start making informed decisions? Please, add to that.

I agree. Most HR folks and people who make decisions for their company as it relates to benefits are very familiar with the fiduciary responsibilities for 401(k). That was a big crackdown some years ago and you can’t have all these big fees within the mutual funds and other things that make up your 401(k). That now is because of CAA been brought into a big part of it being CAA, into the health insurance, the other side of the benefits, the health insurance, the other side of the benefits and not just the financial pension side.

Up until the J&J suit and now there’s a suit against Blue Cross Blue Shield in Michigan from the DOL. There’s many others that are out there but you’re going to start hearing more. For lack of a better word, and this is tough but there’s blood in the water. Now people are seeing that they heard about it and knew they should but there’s no penalty for it.

Nobody was enforcement, but now we’re starting to see enforcement. The good news and bad news, the good news for the consumer, all of us in the long run, is all this is going to mean we’re going to be able to help out and to make better decisions. The bad news for plan sponsors is now they have another thing they need to focus their attention on.

Benefits with Friends | Paul “Joey” Stone | Benefit Decisions
Benefit Decisions: The good news for consumers is that, in the long run, all this data will empower them to make better decisions. However, the bad news for plan sponsors is that they now have another layer of complexity to manage, even with the best benefit plans in place.


You could have the best benefit plans in the world, but if you’re not doing what you should do for a fiduciary and financial responsibility standpoint or from a compliance standpoint for all the other things like the 1095 and things you mentioned. You could be shut down. The penalties and fines are outrageous. For instance, like Cobra notices as a little example. If you’re out of compliance and you don’t do what you’re supposed to do, the fines can be asked for in public. They can shut the business down.

There’s no question. In reality, most of our clients and prospects are not Johnson and Johnson size. We’re not going after jumbo account. We’re working with companies with 100 to 500 to 1,000 employees. That’s our niche. That’s what we want to talk to, because they’re severely underserved. The Department of Labor is not coming after you. However, your biggest risk is your smartest employee. Your most informed employee, who’s going to say, “I don’t like this. I don’t like this determination on my explanation of benefits, which happened this week. Is your is my plan paying according to the plan document?” Especially for self-insured.

Is my TPA, my insurance carrier, or my plan? Why did I have to pay? I’ll use TecFidera. TecFidera is a medication that’s out there. It’s at the heart of the Johnson & Johnson suit. If you can go on GoodRx and you pull up TecFidera. You’re going to see a price from $30 to $2,000, even on GoodRx, depending on where you show up.

Now if you’re a member and you need this medication, and let’s assume, I don’t know if this is an injectable medication or a specialty. It might be a pharmacy medication. Maybe if you’re lucky, it’s part of your pharmacy plan. If you have an HSA plan and you have a high deductible health plan and your pharmacy spend or your pharmacy cost is going towards that deductible. You walk into the pharmacy and they ask you for $2,000.

You’re smart enough to know, “Why are we paying? Why is my ABC insurance carrier charging me $2,000 for something I could have bought on GoodRx for $30? This is a big problem. My employer made this health plan decision. Pick the TPA and this pharmacy benefit manager, presumably. Why aren’t they protecting me from that?” That’s the biggest risk that plan sponsors is their own members.

Especially in the mid-market, where you’re talking about the $100 to $1,000. It would be a fluke if the DOL stumbled upon them. Again, it’s bigger fish and bigger target, but the employee making a complaint or being aware. It’s a big deal. The other thing too, by the way, you’re right. That drug for the J&J was that and it was an employee that was “the whistleblower” from what I understand.

When you think about, “I’m fully insured that my X, Y, and Z carrier, the big names that we all know, is taking care of all that and it’s done.” I hate to say it but nothing could be further from the truth. It’s the exact opposite. You have to be very careful and be very aware. Again, it’s a yet another thing that plan sponsor, whoever the decision makers are. You need to be very cognizant of and get assistance. Don’t try to do it on your own. There’s all kinds of people out there that can help you like boo.

That gets to the point. I look at the health plan like this. There’s four components that go into your health care spend then you decide how to finance it. You’re going to buy a fully insured plan, a self-insured plan, and stop-loss. You have your medical claims. This is how every single plan in the country is priced. What’s the expected medical claims of this population? Add 20% to 25 % on top of that. That’s what the underwriters do.

You say, what’s the pharmacy spend? What’s the expected pharmacy spend of this population then add 20% to 25% on top of that. That’s your claim spend. You’re going to buy stop-loss. What’s the risk of the members of this population going over whatever that specific level is or if you’re fully insured, there’s a pulling charge. People don’t even know. They don’t even see this. You have high-cost claimants. Depending on the size of your company. You’re either directly going to be responsible for all of those excessive claims or you’re going to be pulled with other similarly sized groups.

You’re going to be paying not only the expected high-cost claim exposure of your members, but also the rest of the members in the group. There’s all this admin retention, overrides, commissions, and taxes. That’s your four pulls. Within each of those four pulls, you have the ability from what I’ve seen and I’m sure from what you’ve seen to reduce those pulls anywhere from 20% to 40%. Pharmacy probably being the largest one that we’ve seen and other advisors that we’ve spoken to. Up to even 55%, it’s amazing what happens in the PPM world, which is under investigation by the Department of Justice as well.

Those are the four pulls. If you’re a plan sponsor, HR director, or CFO, what we’re saying is you need to understand this. You don’t need to understand the nitty-gritty. That’s what you have your benefit partners for. That’s what you’re paying your broker for, service, golf, outings, inners, or things like that. That should not be how you make your determination.

From a fiduciary standpoint, if you’re large enough, you should know exactly how do you make this decision? How do you pick your plan design, your carriers, your funding mechanisms, TPA, or PBM? It’s taken you and I many years to learn what we’ve learned. I always say, it’s been the last seven years since that you can see it. HR leaders and CFOs are not going to dive into this as deep as we have and as deep as our job requires us.

Nor should they. They shouldn’t have to. They need to be aware and they need a trusted advisor to help them make the right decisions. It comes right back to the questions we were talking about that every buyers.

That’s what I want to get to now. I want to help HR people and business leaders out there elevate their understanding then reset their expectations. If you haven’t done anything or looked into this deeper, you are paying too much. There’s no if ands or buts about it. There’s a very slim chance that you are getting a great deal, especially if you’re fully insured. We know the way the game works.

Let’s talk about these five questions. These are going to be off the cuff, but I’m going to throw one out there. Tell me what you think. Maybe we’ll sharpen these up a little bit. For an HR person to think about and maybe ask their benefit partners. How is my current plan helping me meet my fiduciary responsibility? Open up that conversation. See how familiar your current broker partner is with your fiduciary responsibility.

Do they feel that that’s even within the scope of their services? Do they have a research? I am not a HR consulting company, but we have partnerships on the ready. We have an HR consulting company that will do a free consultation with our group. We have another company with an unbelievable software that I love that will take a plan sponsor that wants to dot every I and cross every T through the process of explaining what a fiduciary is, what a fiduciary committee is, and the importance of having one. They’ll give them the roadmap to becoming fiduciarily sound. That’s just that question there. It’s going to spark a conversation in your broker. Your brokers are going to say, “I don’t know. I don’t even know what you’re talking about or I’ve been waiting to have this conversation.”

“I’m glad you’re asking because this is what we’re doing.”

 “I’m so happy that you’re ready to have this conversation. Maybe they’ve been trying to have this conversation with you. I don’t want to throw brokers under the table. I want to help you elevate your expectations so that you could help them meet their full capability.” If they’re not capable and not willing to step up for their clients, then they should get into a different type of insurance, frankly.

The second question, is my current pharmacy benefit manager contract mitigating, rebates and spread? You and I both know that if you have a pharmacy benefit contract that you don’t have any control of that’s embedded into a fully insured plan, then you’re probably paying 100% too much for your pharmacy, meaning you’re caused by 50%.

We see it all the time. We do it all the time.

You do analysis all the time. You have your preferred PBM partners that are passed through. I’m not going to get into all the details of what that is.

We could have a whole other conversation on PBMs for a while.

We’ve done that call, but rebates and spread pricing, essentially rebates are a coupon that your insurance carrier or pharmacy benefit manager has after you’ve paid top dollar and some. They’re getting a kickback and they’re not sharing it with you. It’s artificially inflating all of your prices. Spread pricing is when they take the smaller, high quantity medications. I’ve seen some as much as $2 medications that they’re charging $200 or they’re not charging. They’re paying $200 for. Was that 1,000%?

Something like that.


It’s a lot. It’s got a lot of zeros behind it.

It’s hidden in your claim spend. Have that conversation about your contract and sparking that conversation. You’re going to know, is my current benefit advisor up to the challenge? Are they capable of doing what we need to do as a plan sponsor to build a high-performance health plan? Third question, how is my current plan helping members access high quality care?

I can’t answer that.

What is your plan design doing? What support does your plan have for your members when they need it the most?

What type of tools do your members have to even know what a high-quality provider is? From experience, if you rely on the employee to do all the research on that, it’s probably not going to happen. I hate to say it, they’re intimidated by it. That’s a great question. What is your plan doing to help members find high quality care?

Why are you spending X amount on your health insurance? That’s what you think you’re buying. You’re not. You’re buying health care. Shouldn’t you be spending that money wisely? Wouldn’t you sleep better at night knowing, “This is going to work for my employees and their members?” The value of an employer that gives a plan that says, “We care,” goes a long way to making that an employer of choice. We’ve built plans that have taken care of members where they are forever in debt to their employer. I’m not joking. We’ve saved lives and we’ve saved a lot of money. That’s why I get passionate about.

An interesting point to that question alone is in healthcare, unlike almost every other ecosystem. Sometimes the highest price is probably the worst quality. The lowest price is the better quality. It’s hard for people to even grasp that because it’s so opposite of what it is in almost every other ecosystem there is.

In healthcare, sometimes the lowest price is the better quality, and it's hard for people to grasp that because it's so opposite of what it is in almost every other ecosystem. Share on X

The top doctors do it day in and day out. They do so much of it. You don’t want a doctor that does it for the sake of doing it to get paid. You want a doctor that’s doing it at a very high level when it’s appropriate to do it and that’s what the data shows. We can help members. Why wouldn’t insurance companies do this? Fully insured plants could do every single thing that we’re talking about.

There’s no incentive for them to do it.

They don’t. That’s what’s so frustrating. That’s one of the things I want to be very laser focused about. Nothing that we’re talking about is outside of the reach of a health insurance carrier. If they truly were motivated to do what the first page of their website says, which is care of the health and well-being of their members. If that was their number one goal, they’d be building health plans like this. That’s got me be fired up.

A similar question, but I want you to think about this a little bit differently. Are my current plan designs working for my most vulnerable employees? Most vulnerable employees to me are the ones who are the sickest, who access care the most or are the ones who are the lowest paid employees? Your lowest paid member, on average, less than a thousand dollars, the average American family has in the bank. The average deductibles 2 or 3 times that. How is your health plan serving your most vulnerable employee?

Those are the people, by the way, we talked briefly before we jumped on the air. We talked about all those open enrollment meetings that I’ve done over the years. The most vulnerable people are always the ones that stay after the open enrollment to ask personal questions. I’ve had people cry on my shoulder and I thought I was doing a great job.

I was the insurance expert. I was doing the best I could to mitigate the premium increases and the higher out-of-pocket cost for years. I thought that’s the limit of what I could do. When I saw the real prices and I realized, “I am a pawn. I am a sheep in this game of health care and health insurance. They’re using me and the trust that my clients have instilled in me to perpetuate this plan of action.” I felt exposed and I decided I wanted to do something about it.

I want to be able to go into open enrollment meetings with a message of promise and hope instead. Sit down there and look people in the eye and say, “We are doing the best job we can to provide the highest quality healthcare for you and your members.” There’s a lot of different ways of doing that. There’s tons of ways of doing that, but those most vulnerable people are the people who need it the most. Whoever that might be.

This is something I would ask an HR leader to internalize, a business leader. Is my current plan a recruitment tool that I’m using to my best advantage? Is my plan a high performance health plan that is helping me close the door on those offers? I’m sitting down with people. We’ve had HR people tell us, “Lou, we need help.” What’s going on? I want to know. How can I help?” This is a real tough hiring market. We’re in a very competitive industry and our plan is not meeting the needs of our candidates. Everybody’s telling us, “It seemed like a great place to work, salaries competitive and everything,” but your health plan stinks.

We used to hear it all the time. It’s cost and plan design. It’s all different things to different people. That’s where it is frustrating because we can do a lot about every one of those things. It’s not helping you get the top quality talent that you want and keep the top quality talent you want. Why are you offering it?

I’ll add one thing to it. You look at that balance sheet, if you’re a CFO, if you have access to it or you’re an HR leader. Whatever that spend is, if you haven’t dug deep into it and looked beyond the traditional solutions that are out there, if you haven’t looked at that plan and you haven’t done anything. Look at that and say, “What would I do with 20% of that money coming back to our company?” You’ve already spend it. What would I do if I could get 20% of that back? Anyway, I’ve kept you on long enough. I can tell already you had a call at 3:00.

I’m good. I’m going to that point. That’s very real. I used to work with a lot of auto dealers. I worked with all industries but with my last consulting career was with a lot of auto dealers. You save someone a $650 life group of million dollars. That’s a lot of money. If you ask that dealer, how many cars would you have to sell to get a million dollars in profit? It’s a big number.

Car dealers don’t make a ton of money on a new car sale. Everybody thinks they do. If you want service and use car and everything. They do, but it’s a lot of cars. It’s insane how many cars it is like $50,000 until $100,000.

If you could say $500,000 and you and you sell widgets. How many widgets do you have to sell to have a net profit of $500,000? If you could be a million dollars, our Rose Award Winner saved $1.2 million. Veterinary hospital system in New Jersey. That’s an awful lot of teeth cleanings and preventative diseases. It’s an insane number.

This has the potential to make your HR leader, your top salesperson, in theory. It gives them a skill that they can put on their next resume. Not that we’re letting help with your HR leader to led you. You’re going to formulate a skill. You’re going to learn a skill that’s going to set you apart from other HR leaders.

It’s so important for a HR person to understand benefits and how to maximize the efficiency of their plans and so on. It’s huge. You don’t see it all the time. It’s a huge differentiator.

CFOs and COs are compensated. Their bonuses are compensated on profit. This is profit in your pocket.

I would say don’t let the conceived complexity or perceived complexity. Don’t let that stop you from learning. Take the time and do it as a HR person or an economic buyer for your health insurance plan.

Benefits with Friends | Paul “Joey” Stone | Benefit Decisions
Benefit Decisions: Don’t let the perceived complexity deter you from having these conversations. It’s actually not that complicated.


It’s not complex at all. It’s more work for you.

It’s perceived complexity.

When you buy Etna, UnitedHealthcare, or Anthem, there’s 30 to 40 or more other entities patched in there that they hand-picked and they cherry-picked because it works for them. They’re getting kicked back from.

They may even own.

All we’re trying to say is we can duplicate that and improve upon it. Essentially, what this is, is it’s that plan, plus everything it should be but it isn’t because of the misaligned incentives, bottom line. We can build a plan and employers, more importantly. You get the credit for bringing in a partner to challenge your benefit, consultants, take those five questions, go back and see what they know and elevate your plan. Make it work for you and your company and your members. Anyway, I want to thank you, Paul. It won’t take 50 minutes. I tried to do it in 30, but once it gets going, it gets going. I’m going to work on it. I’m long-winded.

You’re good. It’s awesome. I appreciate you having me on again for the third time to try. Again, my closing remark for what it’s worth is if you’re that person in your organization that’s responsible, you and a part of a team that is. Don’t let the perceived complexity keep you from having these conversations because it’s not that complex. You can learn it very quickly, at least to the extent that you need to understand it to make good sound decisions or at the very least, to know when a consultant is full of hot air or they know what they’re talking about.

You have to do to pick that trusted partner. That’s my closing comments because I’ve seen it happen so many times. When people do take the time, it’s not a lot but when they do take the time to learn. They become so empowered in this. It’s like a light bulb going off. It’s like, “I didn’t know my PBM was overpaying for all these drugs until we did this, that and the other. I didn’t know you could look for drugs from internationally or whatever the case might be.” It’s one example.

I use this analogy all the time, “No one would drive their car if they had to know mechanically everything that was happening in order to drive it.” It’s as simple as that. You open the door, sit down, start the ignition, put it in drive and use the pedals and the steering wheel. When you get to your destination, you put it in park. You turn the car when you get out. Now, if you’re the type of person that needs to know what’s happening within the engine, the combustion, and the electrical part of it when you put the key in. Exactly what’s happening with the fluids in the brake lines and everything. You’d never drive.

Not how turbo’s work.

Unlike driving a car. You have to make sure that you’re getting the most out of that experience and that’s what we’re trying to help with. Anyway, I appreciate. Thank you so much.

Thank you.

I’m sure you’re probably be on a fourth time. We’ll see.

We’ll do it. Thank you.

Enjoy. Thank you. Bye-bye.


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