BWF 39 | Fiduciary Responsibilities


Employers have a tremendous opportunity to take control of health care spending with the incredible growth of technology in the healthcare space. The recent legislation also increases the fiduciary responsibility of plan sponsors, and companies like Talon can unleash actionable data like never before. In this episode, Lou and Mark Galvin discuss healthcare’s challenges, opportunities, and future. The day the Transparency in Coverage Rule was finalized, most existing healthcare price transparency tools became obsolete. Legacy tools with legacy architectures become non-compliant when real prices and patient out-of-pocket responsibilities must be displayed rapidly and accurately to comply with the Rule. It is, therefore, necessary to partner with TALON to provide accurate negotiated rates to the consumer in a fully individualized user experience that supports consumers’ essential information needs when healthcare purchase decisions are being considered and made. Join Mark and Lou in this conversation to find out more.

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Helping Plan Sponsors Meet Their Fiduciary Responsibilities And Unleash True Consumerism Into Health Care With Mark Galvin

We have a great show for you. Hopefully, an informative show, especially for any benefit advisors out there. HR leaders, consumers, and people who are interested in healthcare and health insurance. I’m going to bring in Mark Galvin. How are you?

Great, Lou. How are you doing?

I’m doing awesome. It’s the beginning of the fourth quarter. We’re three days in.

Looking forward to enrollment, I presume.

We’re fortunate. We have some early large-group renewals in August, September, October, and November. We’ve gotten 50% of our larger accounts out of the way already now. It’s a lot of small, under 100 New York accounts we’re working on. A ton of Decembers and some carriers dropping out of the market. We have some work ahead of us, but we’re a little ahead of the game.


BWF 39 | Fiduciary Responsibilities


We’re focused here at BritePath on helping employers optimize their benefits, not just focus on buying that insurance that everybody’s been buying for 30 years of managed care that has wreaked havoc on companies and people’s out-of-pocket costs. These plans deliberately keep the consumer in the dark, the people who are buying insurance, people who are deciding on which plan to select of the options that their employer might offer them. It is even more troubling when they enter the healthcare system and how badly they’re taking advantage of there.

I’ve had my eye on talent for several years now and for several different reasons. I want to talk about that. Most of the time, we don’t get specifically into products, but I think that this is such an important topic and the way you can address a couple of different things like the shopping experience, but also some legislation that plan sponsors. I was at the SHRM conference. I didn’t find one person. I spoke to probably about 50 or 60 HR directors. None knew about the transparency and coverage and the No Surprise Act. It is almost none of them because who do they rely on? Their benefit experts. It’s not a mandate on them. They don’t want to have that conversation. Insurance companies certainly don’t.

You cofounded Talon in 2014. This was ahead of the legislation. I’m interested in finding out how you identify this need. I know that you’ve been to the White House. You’ve been speaking and showing your technology to all of our esteemed leaders at the federal level. I can’t wait to hear a little bit more about that. Why don’t you introduce yourself? I know you have a pretty impressive background and a lot of different companies.

My name is Mark Galvin. I’m President and CEO of Talon. Some people know us historically as My Medical Shopper, which is the campy owl brand we started under. As our products expanded and we’re heavier duty into the analytics side as well as all the shopping experience stuff that we’ve built out, we rebranded the company. We still use My Medical Shopper as the brand on the functionality, which fulfills the requirements for transparency and coverage rule of the Affordable Care Act.

What’s probably a little bit interesting about me is I’m not from the healthcare industry. I still consider myself a newbie, even though we started this company many years ago. My life has been focused on trying to help move the needle on cost containment around healthcare costs for consumers. My background and how I got into this is I’m a serial tech entrepreneur. I have done four venture capital-backed startups historically all in voice and data communications, ISDN, voiceover IP, internet software, and remote access. Those were the industries that I served.

My third startup, which made number two on the Inc. 500, they were a pretty rapid growth company because we set our sights on what should be happening that wasn’t being done. We have a pretty good gut instinct for what people would like to see happening versus what is happening. That company was called Cedar Point Communications number two on the Inc. 500. We helped the cable industry bring voiceover IP to the entire country. Some of us can remember the days of $0.35 long distant minute calls on our copper wires phone calls to now unlimited voiceover IP around the world, and now we’re speaking across video over IP effectively which all leveraged off those technologies.

That’s where I came from. How did I get tied into benefits? When you’re a startup person and starting up new venture capital-backed companies, not only are you a CEO/founder, but you’re also a director of HR. I’m also a little bit of a disruptive innovative type of guy who takes very few things at face value. I am always very inquisitive about stuff. It so happened that I got instructed by my family physician. I have a wife and five kids, so we were pretty frequent with the family doctor. He sold his practice to the hospital system locally and he left it because he was sick of being told how he should operate his medical practice by insurance carriers. He became the early case of a direct primary care physician. I went with him.

I got schooled on high-deductible health plans and health savings accounts by my doctor because it turned out that people on these catastrophic plans, these HDHPs tended to sign up for his DPC service because they could pay a fixed amount and call him day and night and get whatever care they needed that a family practitioner could do. It was fabulous care. This was the start of my awakening as an employer. Most of your audience are probably brokers and have some HR teams. Those HR teams maybe have the C-Suite poking their heads in a little more frequently now because there’s a lot of noise about the fiduciary responsibilities.

As people started to learn about this thing called the Transparency and Coverage Rule, which was added to the Affordable Care Act in October of 2020, they’re going to hear about the fact that as an employer, you could face $100 per member per day fine for non-compliance with that rule. These are potentially company-killing fines. We’d roughly say if you multiply a certain number of members per subscriber, call it 2.2 or something, which seems to be shrinking, but it’s like a $87,000 per employee per year potential fine against an employer for noncompliance with these rules.

I was an employer. I was thinking about this high-deductible health plan stuff. We always give $0 deductible platinum plans to our employees. We’re in high tech. I certainly didn’t want to change that per se. I didn’t want to expose employees to possible healthcare expenses, but it occurred to me that we could structure something a little differently. I purchased the highest cost, the highest deductible health plan at the time for a family was about $10,000 deductible. From premium savings, we funded 100% of the $5,000 IRS limit for HSA deposit for each subscriber. That’s money that they get to keep. If they don’t use it, they get to roll it over and grow tax-free or tax-deferred as a retirement account for them. If they change jobs, or whatever, they get to take it with them.

I thought that would be a pretty interesting way to make people care about what the costs were a little bit. We indemnified them also and said, “The deductible’s up to $10,000. You only have $5,000 in your HSA.” If you’re among the unlucky ones who burned through your HSA dollars, this was before you could invest it. Most people would spend right out of their HSA on their debit card if they had care. If you went over the $5,000, you bring your EOB into HR and we’ll cut you a check for the difference until you hit the $10,000 limit, at which point that catastrophic HDHP health plan would kick in and pay everything.

It was a little bit complicated for people. This was weird, but if you’re healthy, you could have an extra $5,000 bucks, and this was $2,005. This was even more meaningful than it is now in terms of value to them. What we saw was quite amazing. The company saved 32% on what it would’ve cost to buy all platinum plans for everyone. Even with that rich benefit. Even with full funding of the HSAs. I surveyed the employees at the end of the first year to see how much money they had left in their HSAs. I found out that on average, they had about 75% of the HSA dollars left.

Just because New Hampshire, where we’re based, had MLR, Medical Loss Ratio rules as we have on a federal level now. When my renewal came in for the company, we got a 7% reduction in premium. It’s like, “What’s wrong with this? Everybody should be doing it.” I’ll tell you what was wrong with it. I turned all my employees into consumers of healthcare. When you become a true consumer of healthcare, you become a very frustrated consumer.

Why are you frustrated? I think we all know. It’s because you walk into the medical facility or your doctor’s office and you ask the normal consumer question, “How much is this going to cost?” They go, “Aren’t you insured? What’s wrong with you?” It’s like, “No, I’m covered. I care how much it costs.” We don’t know how much it costs. We can’t tell you. We can’t figure it out. We won’t know until possibly, this is back in 2005, it could be 3 to 6 months before we’ll even know how much it’s going to do because all these forms are flying around in snail mail back then. That was pretty frustrating when you became a consumer.

Now, it turned out the employees loved it because they made out like bandits on the money. I still have people, when they worked for one of my companies which I’ve been doing that same plan design since 2005, they come back and say, “It’s the best plan design I ever had. The best plan we ever had. I’m still using money from that HSA to cover other out-of-pocket expenses at my new company.”

Anyways, it was a frustration for all of us, though, that we couldn’t get the information we wanted to get as consumers. Roll forward a little bit. I built two tech accelerators here in New Hampshire intended to help startup companies get going and leveraged some of the past experiences my team and I had. I got pulled into a bunch of legislation in Concord, and they’re saying like, “What can we do to help small companies?” One of my pet peeves was, “If we could get providers to post their cash pay prices, or we could get them to put the schedule of the discount rates for the carriers that we use, then we could leverage this thing that I do with my companies called High Deductible Health Plans and HSAs. We could shop and go to the highest quality, but the most appropriately priced care like a normal consumer.”

I recognized what the healthcare lobby looked like after driving up to Concord for the three-hour meeting with the Health and Human Services House Panel and the lawyers all coming from AHIP from Washington DC. The Anthem Government Affairs Committee and Government Affairs VP walks across the street from her office near the State House. Everybody’s like, “Nothing’s going to happen that they didn’t think of.” This is something they have no interest in seeing happening.

What happened was, that I discovered in the communication, that there was a state-level database called an all-payer claims database. Being a technology guy, understanding Amazon’s cloud service servers and I was an early adopter of mobile-first application development, I said, “We can’t get them to post prices or tell us what their negotiated rates are, but guess what? If I can get my hands on that state-level all-claims database, which is post-adjudicated, I can back into all the negotiated rates for all the payers. At least I can fix it for New Hampshire with a mobile app.” What was I doing was fixing it for myself and my employees because we’re a perfect example of the frustrated consumers.

With that, I came back to the tech accelerator called the New England Innovation Center. I found my co-founder, Matthew Robinson, who is our Technical Director for the center. It was six months after I discovered the thing, but I got a CD ROM that had 100% of every post-adjudicated claim that occurred with a payer in the state of New Hampshire. Every single postage account claim with all the allowed amounts and the build amounts and the codes and all that stuff on it.

I went to him and I said, “We’re going to start a new company to fix this problem.” I have this yellow sticky note from Dr. Stein, who was the doctor who had taught me about high deductible health plans in the first place. On it, it had a CPT code for a nuclear stress test because when I’d been in his office, I had a right branch bundle block on my EKG, and he wanted to send me for a nuclear stress test. When I asked him what it was going to cost, he said he had no idea, but I wasn’t going to drop dead. He gave me the CPD code, and it was my 53rd birthday, roughly. He also gave me a colonoscopy code because I hadn’t had my first colonoscopy yet.

Shame on you.

When you figure out how to shop these things, you give us a call. We’ll send the order wherever you want. That’s no problem. That was the experiment. DVD ROM with the claims database for 2012 in New Hampshire. Yellow sticky note with two procedures that I had to find the lowest cost and highest quality, but what I was looking for is I wanted to know what the lowest costs were in the state. When we got that data and we started digging into it, it blew our minds.

We took the top 100 most frequent procedures that were occurring in the state of New Hampshire. We pulled them all out of the claims. We said, “How much did everybody spend at each place they went to? If they’d gone to the lowest cost place in the state rather than the place they went, how much would’ve been saved?” It came out that 72% of all claims costs would’ve been saved if everybody went to the lowest cost provider of the top 100 procedures. That blew our mind.

We started reporting out on this sort of stuff. I think now, at least people in the industry recognize that there’s a huge disparity in in-network negotiated rates. You may have the best discounts from your Blue Cross Blue Shield Association members because they may be dominant in your market. What you don’t find out from them typically is that where you go, which facility, on which side of the street, or even what side of the building you go can significantly change the cost. There’s a difference between high to low on most non-office visit type procedures. Most of the things that people hadn’t been checking carefully.

There's a huge disparity in in-network negotiated rates; you may have the best discounts from your Blue Prosecutive Shield Association member because they dominate your market, but it can significantly change the cost. Share on X

We built the company a lot differently than others. There were transparency companies that couldn’t help me with my CPT codes and couldn’t help me find specific providers. They were captive by a lot of the payers who didn’t want the prices to be known. They also didn’t want to get involved in directing people from one provider to another necessarily because they’re contracting with lots of providers and they didn’t want to play favorites, I think. They tended not to want to get into this. Of course, the old 80/20 rule or the MLR rules create perverse financial incentives in the system that, who would blame a fully insured carrier for them not want you to necessarily note now navigate to the place that’s 95% cheaper than the expensive place.

When you consider that they’re on a cost-plus-basis contract effectively, for every dollar that is saved for the consumer, they lose premium and revenue. Unfortunately, that perversion makes them, in some cases, act as they should when they’re put in that position. We’d probably prefer they didn’t, but if you were on the line to drive profits and revenue, you wouldn’t be interested in being forced to cut your revenue in half by helping people navigate to the lower-cost locations. These are the sorts of things I learned as an employer, and then getting into this and more and more deeply.

What happened is we didn’t want to stop for New Hampshire. We started expanding first regionally in New England. We did a lot of that using these all-payer claims databases. We managed to get Maine, Massachusetts, and Connecticut which also had good databases. APCD have been developed by the folks from the University of New Hampshire originally under some legislative initiatives way back 20-plus years now. They ran the APCD council and we’re going and seeding the rest of the country with ideas on how to do the same thing New Hampshire had done.

We followed that because New Hampshire let us get access and a lot of the other APCD states let us get theirs. We then built a bunch of additional technology that would allow us to crowdsource claims out of subscriber portals from their health insurance plans so that we could bring any employer group into the system and then farm claims out of their employees with the employee’s permission farm claims and back those into our database for crowd use effectively.

In 2018, we were doing a launch nationally. It so happens that I got an invitation to meet with Katy Talento, who was a White House Advisor for Health Policy in the West Wing. I showed her what we had built and why we built it. I showed her our shared savings reward program, which takes money out of the pockets of overpriced providers and splits it between plan participants and plan sponsors as an incentive to care about price if you happen to be on a copay plan and maybe you don’t care what things cost so much. I showed her all that and why we did it. A lot of people in DC had no idea that the in-network negotiated rates were as wild and wide as they are because that information had been well hidden by the industry.

Intentionally. It’s not an accident.

By the way, there’s a wide variation in Medicare rates, almost the same percentage, believe it or not. It’s slightly lower magnitudes because that’s all compressed. It’s still a very wide disparity in prices depending on where you go for the procedure. Anyways, for about two months, she got me around DC and we demoed and explained. That culminated in the big pow-wow a little after Thanksgiving 2018. Those meetings resulted in this guy Andrew Bromberg, who was the Domestic Policy Council on the cabinet deciding to go ahead and use the Affordable Care Act, Obamacare. Keep in mind, this is a Trump administration now rulemaking under Obamacare to create a new rule called transparency and coverage rule.

That has incredible teeth to it. The rule says three things and three phases. The first phase is as the law is stated, not necessarily the way it’s implemented, but the law is and the rule says, “January 1st, 2022, all plan sponsors AKA employers offering commercial health insurance must assure that an in-network machine-readable file is posted on the public internet,” which exposes all the in-network negotiated rates their plan is willing to pay on behalf of participants. That’s a key one.

BWF 39 | Fiduciary Responsibilities
Fiduciary Responsibilities: January 1st, 2022, all planned sponsors, AKA employers offering commercial health insurance, must ensure that an in-network machine-readable file is posted on the public internet exposing all the in-network negotiated rates.


That was intended to allow all types of app developers and analytics folks to be able to suck these prices up. Also, quite directly to say, “You guys shouldn’t have to back into that by fishing through the tea leaves of historical claims from what was to find out what is going to be. You should be able to get to those prices.” What they said is, that the way we’re going to do that is we’re going to use our ability to levy fines against plan sponsors employers up to $100 per member per day for non-compliance.

They can do this because employers take benefits of writing off these expenses against their profits, taxes, and Department of Labor over oversight on how they treat their employees and things like that. There are a lot of rules they have to follow and the Federal Government has the right to levy fines if you violate those rules. They’re using employers and that as a big hammer on the industry to now open up price transparency.

That was phase one. Phase two was January 1st, 2023, and all participants, members, and that amounted, according to the rule, 212 million members of commercial health plans need to be provided with an internet-based consumer price comparison tool that shows the actual negotiated rates. As well as patient out-of-pocket responsibility and in-and-out-of-network guidance. A bunch of other specific things. Effectively, what it said was, “The stuff that Talon showed us, we now know it can be done. Therefore, we can require it.” They mandated it on everybody at that point. This coming January 1st, 2024, it’s not just 500 services, it’s all services.

We have to do it programmatically. It’s a very complex thing. We feel lucky. We weren’t trying to create a problem for people. It’s a lot of effort, but it’s going to be great for employers, employees, and consumers. It’ll be good for those who innovate in the provider and payer space also because the markets will adjust with efficiency as you bring the consumers back into the marketplace. It’ll create opportunities for those who want to drive innovation and make things better or faster, but cheaper. Air quality care, lower costs. These are the things that mass markets reward when you have symmetric information between merchants and consumers.

BWF 39 | Fiduciary Responsibilities
Fiduciary Responsibilities: The markets will efficiently adjust as you bring the consumers back into the marketplace.


That’s what we’re all about. Now, it used to be we sold only with and through brokers to employer groups. A lot of consultative discussions around how to build plan designs. Your employees care what things cost, but you don’t end up costing them more out-of-pocket expenses. If you’re going to go with a high deductible health plan, which I would recommend to everybody, honestly consider it. If you do it right and you provide a funded HSA account that’s commensurate with the appropriate deductible amounts and stuff. Effectively, dollar for dollar on an actuarial basis, when you provide an HDHP to your subscribers, you’re getting more for it than you are with a copay plan.

I wanted to jump in because one of the things, if there are plan sponsors out there listening to what they heard, but maybe didn’t realize they heard, is the burden is on them. The Department of Labor cannot impose penalties on a third party. This isn’t something your insurance company has to do. This is something you as a plan sponsor have to make accessible to your members. If you’re fully insured, your insurance company is very happy to at least give the perception that they’re helping you comply by putting this on their website somewhere where it’s not necessarily very easy. They’re not promoting it. They still don’t want your members to be consumers because it hits them in the pocketbook at the end of the day.

The whole point of this is that you can empower the consumer who’s been groomed by 30 years of managed care, groomed deliberately. Doctors are good people, but they work within a managed care system like your doctor became part of. I love direct primary care. It’s not booming here in New York yet. There’s one on Long Island that’s full-time brick-and-mortar. My daughter is a patient of that doctor because the care is night and day. That’s what you get when you go to a doctor.

BWF 39 | Fiduciary Responsibilities
Fiduciary Responsibilities: You can empower the consumer groomed by 30 years of managed care.


It’s not because the doctor doesn’t want to be a good doctor. It’s because the doctors’ got to see 100 people per day, have 7 minutes on average, and spend 5 of those 7 minutes typing notes. If they don’t put those notes in the system, then they go to work 4 hours after the day’s over. I wanted to talk about the plan design though. The technology is great. It can help the employer comply and avoid those. When you said, hopefully, the audience is per member per day, so that’s per enrolled person, belly button. If you have a family of 3, that’s 3 people. That’s $100 per day per family member. That’s where that $80,000 on average, 2x, whatever it is times $36,500. Except on leap year, you get one extra day of penalty.

If you take a plan because HRAs have been around for a while, Health Reimbursement Accounts. That concept has been around for a while. There are a lot of different TPAs that help administer that from the debit card process. From a plan sponsor perspective, for me, what I fell in love with Talon was that you can take this plan design. Let’s assume you have a platinum or a gold level plan, a pretty rich plan that’s in the 80th or 90th from an actuarial standpoint, it covers a lot.

As you experienced, you’re overpaying for most of your employees. You’re paying because of this fear, maybe the owner themselves, their family, they think, “I don’t want my members to incur this out-of-pocket cost. They can’t afford it.” However, you could take that plan, you could bring it down to the silver or bronze plan. It doesn’t have to be an HSA-compatible high-deductible plan. It could be a high deductible plan that has a deductible, but maybe it doesn’t apply to office visits or prescriptions potentially. There’s a spread in premium and you’re saving money.

Now, as an employer, you say, “I’m going to cover all or part of that out-of-pocket cost that I’ve imposed on my employees knowing that I saved $300,000 in premium. I’m anticipating a $200,000 reimbursement. My net savings after administrative costs and everything is $80,000.” That’s decent. You did okay, but they haven’t solved the big problem, which is the steerage of the healthcare system and the lack of actionable data.

If I told you right now, “Mark, I’m going to buy you a 55-inch TV, but I’m only going to give you $800.” You’re not calling up American Express and saying, “Send me a 55-inch TV.” If American Express makes a vig, which they do, they may send you a $7,500 55-inch TV. That might not be a great example because maybe that’s an outstanding TV, but maybe you don’t want to spend $7,500, you want to keep $800. You can do that for any other product under the sun that I could imagine. I can’t think of anything else that you can’t be an informed consumer and find quality, cost, and no one is going to get there.

That’s why Amazon went crazy because I can make an order and half the stuff will be there when I get home. With healthcare, you don’t know the cost, the provider doesn’t even know the cost. They know their cost possibly. They don’t know what the insurance companies are willing to pay. That’s a huge difference, but it’s almost impossible to get the quality too.

Now, you do that same thing using Talon and you say, “Okay.” You mentioned rewards because I love the rewards, I’m going to go right to the rewards to save a little bit of time. You build this plan and you say, “I’m going to cover X amount of your out-of-pocket cost.” You give them the resources they need at the moment to make a smart healthcare decision and pay less out of their out-of-pocket cost. Under your example, you’re giving them HSA funds instead of my HRA example. They get to keep what they don’t use. If they act like the IRS thought people with HSAs would act when they developed them years ago, they thought they’d be more responsible because it’s their money, they would be an informed consumer but it was impossible.

You’re giving them the power to make an informed decision to secure or keep as much of that HSA. If it’s an HRA, you’re helping the employer save money because they make a smart decision, go where it’s high quality, lower cost, the company saves money, and now you can give the employee a reward for making that smart decision, and maybe another level of HRA potential. From a plan sponsor standpoint, instead of paying back $200,000, your likelihood is you may end up reimbursing $100,000, maybe even less.

More importantly for me, I’m passionate that people need to be able to find the best doctor. For me, saving money is great. I think that’s why people will do it and they should be able to do that. More importantly, especially if it’s not a commodity, like maybe a radiology thing, you could get an MRI anywhere as long as the machine is recent and the tech’s okay. If you have something that’s life-changing, life or death orthopedic surgery, don’t you want to see the best doctor?

It turns out there is no relationship between cost and quality, so the tools and the displays that we do, I’m saying as an example, I took my phone out and I quickly did a search and it was a ZIP code. I was in the Austin area doing a demo yesterday, so I left the ZIP code the same. Very quickly, it told me, “Here are 40 places I can get that nuclear stress your doctor wanted you to get.” You see the little green bags of money.

There is no relationship between cost and quality. Share on X

As I scroll up to the more expensive prices, the green bag of money gets smaller, but there’s a quality score right there. You can find that the third one up from the bottom has the highest quality score available in the system. Even though, you can go find a place that instead of being, $680. That one is the highest quality. $708 is the total cost if I’m on an HDHP, so that’s my out-of-pocket cost also. At the other end of the spectrum, the most expensive one within that 50-mile search was $7,489. That’s with my anthem in-network discount.

That’s the important thing. Those are anthem prices because your technology allows you to input. It’s not the cash price. There’s a lot of different technology out there. It’s important. Some people might want to pay cash, but you’re giving them something specific to their plan design. I’m going to go out on a limb and say that $7,000 providers are part of a healthcare system. It’s not the doctor. That facility or that location, you said it’s a nuclear stress test, it’s probably a radiology facility located at or near the hospital. They’re getting hospital prices ten times more than potentially the competitor or an independent radiologist who doesn’t have the buying power.

In healthcare and health insurance, size matters but they don’t use their size to bring down prices for their members. They’re not serving their members. They’re serving Wall Street. They use their leverage to garnish the highest reimbursement. Just because they have a consumer that’s completely in the dark, that poor soul who doesn’t have your tool, that has a $5,000 individual deductible. Even now, even though it’s not paper, you still don’t know until you’ve had it most of the time. Even though technically because of the legislation, you could go on the shopping tool on the carrier website, I’m not so sure that they’re pushing the lowest cost at the menu.

Let me tell you what some of your audience could think about. One of the things we’ve done, because we were big on the education side. Remember, I came with this as a C-Suite employer, and my dismayed at how my company was being mishandled. If you’re an advisor to employer groups, there’s a huge opportunity here to use transparency and all that brings now to get new business and to say, “There’s some other sleepy broker who’s owned an account forever that hasn’t done the things necessary to drive true cost containment to help reduce costs instead of having these prices constantly going up.” Even a flat renewal is not reasonable with transparency.

If you're an advisor to employer groups, there's a huge opportunity here to use transparency. Share on X

We have a directed selling technique called the Advisor Dashboard. It’s available to any broker, any advisor, or anybody who wants to leverage transparency tools. What it does is it starts with the ability to measure how much is wasted for lack of ability to shop. Running these analytics reports is at no cost to the advisor. It’s a selling technique. It helps us because it grows our business. It helps the advisor grow their business. It helps your brokerage grow. It starts with the ability to measure in a claims file how much money could have been saved if people were able to shop and they had the information readily available to them.

It’s shocking. It runs 35% to 55% of all claims costs can be saved through shopping. On average, we see about 41% in these reports as we’ve worked out. You’re never going to get perfect shopping, but it starts the conversation like, “How do I get my employees to care? How do I get them to care and not spend too much time worrying about it instead of doing what they’re supposed to be doing or what they’d rather be doing, hanging with their families, getting their jobs done, or whatever?”

The answer to that is you have to have a plan design that drives a consumer incentive to care. You then need to put in their hands something that’s frictionless. Fifteen seconds or less show them all the places they can go. They can launch it on their mobile phone while they’re with their doctor or at least with the doctor’s business office. Before they ever leave the building, it’s like the doctor says, “Those headaches you were complaining, we want to send you for an MRI of the brain.” You quickly search it out. To your point, it’s commodity MRIs now.

BWF 39 | Fiduciary Responsibilities
Fiduciary Responsibilities: You should have a plan design that drives a consumer incentive to care.


“Doc, here’s all the places I could go. There’s one halfway on my way home here that’s $600 instead of the $3,000 one that’s across the hall from your office.” Any problem with me going to the one that’s $600? I can tell you doctors don’t want to hurt people financially. They want to help people. My experience is that they’re fascinated when you pull this device out and they want to look up a bunch of things. “How did you know that?”

Because they don’t know.

They are on the good guy team. They are white hats. They care about their patients typically and they want to help their patients. The idea is that we have this thing called a consumer interest calculator. As a broker advisor, you can walk into a new case that you’re not with yet and you can get a copy of the SBC their benefits summary. This calculator lets you enter the parameters of those plan designs and it calculates the likelihood that those employees care what things cost. It’s shocking because most plan designs are designed specifically to remove the consumer from caring. If you have a $200 copay no matter where you go. At one place, it’s $500. In another place, it’s $3,000. You might even prefer the $3,000 cost one because you’re only paying $200 and it may be lower quality.

This becomes a consultative sales opportunity to put a wedge between an existing broker that hasn’t done anything for their plan sponsor or the group that they’ve been serving for 5 to 10 years. A new advisor who’s saying, “I want to build a book of business. I want to do the right things for people.” Those tools are available as part of the system and they’re no cost to advisors. It’s the idea here, ultimately, where there were a lot of discussions.

I remember there was some discussion with the Chief of Staff for HHS of all things at the federal government when I was there back in 2018. We were trying to figure out what percentage of consumers in a marketplace need to be shoppers. To cause the market itself to react, become efficient, and lower costs for everybody. For instance, you and I probably go to the supermarket. We don’t worry about the cost of the head of lettuce when we grab the head of lettuce off the counter and throw it in the thing. We just need a head of lettuce. Somebody else was watching the Sunday flyers and making sure to keep that supermarket honest on the head of lettuce. We’re not going to end up with a $20 head of lettuce when it should be $350.

It turns out it’s like 8% to 10%. If we can get eight to 10% of healthcare consumers to actually take 15 seconds, do a quick little shopping, and then vote with their feet, wallets, and quality considerations, the market will start to reward innovations that increase the quality and decrease the cost. My first flat stream TV was a $12,000 pioneer. That was half of the resale price because I shopped for it. That was a 50-inch plasma TV. I bought an 85-inch for our conference room here, delivered, an 85-inch LCD Smart TV. It was $1,299 delivered. That’s the power of consumers in a mass market and rewarding innovation.

This is my 32nd year. When I started in benefits, there was no managed care, there was no network, and there weren’t HMOs. You went to the doctor. The doctor had a price. The doctor was hoping that what he charged was reasonable and customary. If it wasn’t, the insurance company would knock it down, and then he had to explain to his patient, either, “I’m worth it” or “Don’t worry about it.” Like a body shop, “Don’t worry about your deductible. Just come back next time you have a wreck.” They took that relationship away.

The discounts in the early days of managed care, I think US Healthcare might have been one of the first ones to come through the New York area and HIP was here. They were true discounts because the prices hadn’t changed yet. The North Shore Hospital and LIJ, Long Island Jewish Hospital, was a separate hospital, the prices were hurting them. The discounts, they were like, “We’re bringing in 40% less in revenue because these early HMOs had whatever the discount was, 20%, 30%, 40%.” They got smart and said, “These insurers aren’t going to be able to push us around as much. We’ll have much more leverage negotiating higher prices if we join forces.” They let them. Now, you have these health systems that are 30 hospitals. There’s one that’s up to 200 hospitals on the West Coast.

That was bad enough. You had horizontal mergers within hospitals, but they didn’t stop there. They got smart and said, “What if we take over the specialists and the facilities and the radiologists and the labs down to the primary care doctors?” Now, they work for them. Now they cover the whole gamut and they use the primary care doctors and the specialists as the shepherds to drive people to the lowest value care, the highest price with no increase in quality, like you said.

That’s what’s happening, but the consumer doesn’t know that. The average person who goes to the doctor goes to their doctor and thinks, “This is my doctor.” Doesn’t understand the economics behind it. That’s what we’re up against. You have these companies, the Aetnas, the Cignas, the Blues, you have the United Healthcare of the world that have gotten massive and their shareholders don’t want that revenue to go away. There are pharmacy benefit manager investigations happening at the Department of Justice.

You mentioned it earlier, they are ten years ahead of us. They know what percentage of people are changing their behaviors. They know, because they can tell by the numbers, “Why are more claims going to non-hospital system doctors? Where are our primary care doctor visits?” People are using virtual primary care or direct primary care. Those claims don’t hit them, so they know. I always use this and I’ll credit Eric Silverman for this, “It’s like an English muffin. If you look at an English muffin, it’s nice and smooth. It’s got cornmeal on the outside. If you cut it open, every one of those nooks and crannies is where the profits are that you can’t see. As soon as one of those dries up, they create a new one.”

They’re doing it now. They’re not going to give up that easily because capitalism, greed, or whatever you want to call it, is human nature, unfortunately. Unless the consumer, employer, patients, and members understand the role that they play, managed care wouldn’t exist if the consumer didn’t decide back in the early 90s, “We like this better than indemnity plans. We like $2 and $5 copays and we’re willing to go through this pain to learn this new thing.” What’s a copay? I don’t know what a copay is. That was my job as an advisor in their 90s to explain the new plans and hand directories out to people, which would throw them at me because their doctors weren’t in it. That’s when the owners of companies came to the meetings.

BWF 39 | Fiduciary Responsibilities
Fiduciary Responsibilities: Unless the consumer, employer, patients, and members understand their role, Managed Care won’t exist.


We have to give them another reason to come. We need the C-Suite to say, “Explain this real consumerism.” I call what you guys are doing real consumerism. It’s not just thinking people’s behavior’s going to change because you’re throwing a higher out-of-pocket cost at them. If you don’t have any tools to make smart decisions, that’s useless. Now, you can leverage plan design with incentives to change the consumer’s behavior to get them to the best doctors.

Think about this, for that employee who might say, “What do I care? I still have the same out-of-pocket cost.” I completely understand what you’re saying, but every penny that your employer is paying more in health insurance premiums is a penny they can’t spend on their employees’ bonuses, pay, and all of that stuff.

That’s a tough thing for the employee individually to follow. Collectively, we should all think that way, but that’s not what works. The behavioral economics behind all this has got to be very individualized. The individual has to see the financial implications quickly and understand the scale of it. It can’t be hidden behind a year of adjustments and things like that. This is all stuff that we’ve worked out over ten years, the shared savings reward system.

Interestingly enough, most recently, we just announced something called TALONPay, which is an in-app digital presentment, multi-person Debit MasterCard. Those shared savings rewards that the employer gets to pick what the amounts are relative to the savings they get from the good consumer behavior of their participants. They split those savings with their employee. They give some to the employee and they keep some for the bottom line of the business.

BWF 39 | Fiduciary Responsibilities
Fiduciary Responsibilities: Talon Pay is an in-app digital presentment multi-purse debit Master Card.


Those things can now flow into this fully integrated Debit MasterCard that can be used to turn around almost immediately and spend these dollars out from the rewards. It’s a very immediate economic benefit to their family. If it’s something like shopping for a hip replacement, knee replacement, or something bigger, the reward could be $2,000, or $3,000 bucks. It can pay for your kid’s braces, hearing aids, and all types of things.

I’ll have to follow up with your sales team on that because I got this and I was like, “That’s new.” Just because you’re a tech company, it’s not stagnant. You guys are ahead of the competition. You provide an amazing resource benefit. I have my website up there, I’m going to put yours back up there in a second because if you’re a benefit advisor and you’re not thinking outside the box, you’re not long for this industry. If you’re an employer and you’re going to stay the status quo, you’re going to disproportionately keep paying more of those skyrocketing premiums because you’re not just feeding the system, you’re feeding Wall Street and things like that. I don’t know if we’re at 8% to 10% yet of the market changing.

I’m part of Health Rosetta if you’re familiar with the Health Rosetta database and its team there. I’m one of the Health Rosetta advisors. I’m part of another organization called Aspirational Healthcare. It never ceases to amaze me when I get on a call, a demo, or a discussion about what other advisors are doing in other parts of the country. The resources that are out there are overwhelming. There are so many individuals and companies that are attacking this problem. We follow the KISS, Keep It Simple Stupid. We’re meeting employers where they’re at and saying, “This is what we would recommend to be the first step.”

I talk about self-insurance all the time. It’s not for everybody. It’s probably for most large companies because they don’t understand that claims are not the claims. We had one member on one of our groups that won a Health Rosetta Rosie Award as one of the top 50 health plans in the country. They were self-insured. They had one claimant that was over $600,000 for the last 5 years with a laser in the upper $400,000.

Finally, they had breached their aggregate. The report of large claimants was out of this world and they had to do something. All we did was take them and move them to an independent TPA and an independent PBM. We implemented more advanced case management to support those members, especially the most vulnerable 5% of their population. That one member’s claim dropped by $400,000.

Going to an independent TPA is a very good move right now. They’re a lot more agile. They’re willing to bob, weave, and do the right things to help you with cost containment. They’ll bear a lot of the brunt of the complexities so that HR doesn’t have to deal with it. What I can tell you is since the transparency and coverage rule became law and became active about a year and a half ago now or a little over a year ago, we’ve signed over 60 independent TPAs that are supplying our technology to their entire book of business. A lot of these independent TPAs see the value of the innovations and the ability to differentiate.

Most importantly, I would say they have taken the responsibility. By the way, they’re not on the hook for the fine, like you said earlier, but they’re taking the responsibility to make sure that the employer group is covered and is not going to get in trouble potentially with the Department of Labor, Health and Human Services, or the IRS with this fine. Nobody’s been fined on that yet, but it’s coming probably another year or so. Give people a little bit more time to get in place. As long as you’re doing the right things and you’re taking it seriously, you’ll stay out of harm’s way, I think. There’s the safe harbor provision of these things. You also can’t forget as an employer the C-Suite has a fiduciary responsibility to plan members.

The Department of Labor and a lot of attorneys and litigators have started to say, “This is going to be a low-hanging fruit.” The last thing you want is your customer or the group you’re serving as an advisor or your company as an HR team member. The last thing you want to see is these company-killing fines or litigations coming down on the company’s head. There’s some time to react still, but I wouldn’t sit around and wait much longer. I appreciate you putting up our website there. We’d love to work with people on this. We’re very passionate about it and love to find passionate people who want to help with this movement. It is a movement.

The C-suite has a fiduciary responsibility to plan members, the Department of Labor, and many attorneys and litigators have started to say this will be low-hanging fruit. Share on X

It has to take place. There’s no one coming to the rescue, I don’t think the government ever. They like to talk about things, but they’re not coming to the rescue. The legislation that they’ve implemented over the last ten years even a little bit more than that, provides an opportunity, but they’re very aware of what the largest insurers and health systems are.

Those are the two biggest lobbying groups in the country. They shrink everything else in comparison, so they’re not likely to go back there and lose that source of revenue. It’s up to the consumer. This was great. I can’t wait. I think 2024 is going to be a big year for your company. I hope it is. I hope people will take us up on some of the solutions we could help them with fiduciary costs and things of that nature. This was great. I appreciate you taking time out of your day and joining us here.

Thank you very much. Some hope here for everybody. We take every penny we make and we turn it back into growing the business and helping drive this movement. In 2022, we were 576% year-over-year growth. In 2023, we’re over 300% as we sit here in October. That’s a lot of people joining the movement. We turn every penny back into growing and getting more consumers on board and it’s I think we’re going to see a big difference in the coming years as things the puzzle pieces continue to fall into place and consumers get more comfortable with becoming shoppers involved in healthcare.

We will see a big difference in the coming years as the puzzle pieces continue to fall into place; consumers will get more comfortable becoming shoppers. Share on X

I agree.

Thanks so much. I appreciate your time. It has been great chatting with you.

I appreciate it. Thank you. Have a great fourth quarter.

Thank you. Take care.


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About Mark Galvin

BWF 39 | Fiduciary ResponsibilitiesMark Galvin has been a thought leader and staunch advocate for price transparency and consumerism in healthcare for more than 17 years. He co-founded TALON in 2014 to create and supply a platform supporting a more competitive, efficient healthcare marketplace. In 2018, Mark was invited to speak with and present TALON to the White House Health Policy Team tasked with developing the Transparency in Coverage Rule, including officials from the Departments of Health & Human Services, Treasury, Labor, the Centers for Medicare and Medicaid Services, and Office of Personnel Management. TALON was subsequently used as the model upon which the new Transparency in Coverage and No Surprises Act federal mandates are based.

A serial entrepreneur, Mark has launched a dozen companies and two technology accelerators. Four of his venture-backed tech firms achieved growth levels ranking each in the 100 fastest-growing private companies in the United States as measured by the Inc. 500. His companies’ innovations have been covered in many major media outlets including Forbes, Money Magazine, the Wall Street Journal, the New York Times, and the Huffington Post.