Ironically, this episode aired live on the 4th of May, which is commonly referred to as “May the Force”, a play on the iconic line from Star Wars, “May the Force be with you!” Fittingly, we are joined by Allison De Paoli, the Founder of Altiqe Consulting, who is a “Force” in the benefits arena, having received recognition from many industry organizations. Our conversation focuses on actionable data versus numbers. Most health plan sponsors are familiar with numbers, especially at renewal time to support the inevitable premium increases. Unfortunately, far too many aren’t familiar with the impactful data that is finally available in abundance. Data can help plan sponsors and their members make informed healthcare decisions rather than blind health insurance decisions usually based on premiums. Tune in to this episode with Allison De Paoli today.
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How Actionable Data is Changing Healthcare and Insurance for the Better!
Benefits With Friends
I am going to bring into the show Allison De Paoli. Welcome. How are you doing?
I’m great. Thanks for having me.
Thanks again for being my guest on the show. This episode is all about employee benefits and actionable data. You and I traded some emails about what should we talk about because we could talk about pretty much anything and that was a great suggestion. We’ve alluded to it in all the episodes. A lot of what we’re doing is based on the data we’ve been able to see for the last few years. I wanted to give you an opportunity to introduce yourself. First, I’m going to tell people who you are and then you’re going to add to it. You are the Owner/Principal of an agency, Altiqe. Isn’t it in San Antonio?
It’s in San Antonio.
You are a multiple award-winner in the benefits industry, YouPowered Most Innovative Healthcare Consultant 2022, and NextGen Benefits Advisor of the Year, it’s the same year so you had a great 2022, and BenefitsPRO Magazine List of Top Women in Advising 2019. You are serving as Chair of the South Texas Blood and Tissue Foundation which is amazing and on the Board of The Family Service Association and National Association of Benefits Insurance Professionals in San Antonio. Did I miss anything?
That’s more than enough. I’m the immediate past chair of the South Texas Blood & Tissue Foundation. That was a job near and dear to my heart. They call me Rabble-Rouser so I passed it on to Rabble-Rouser number two. They’re in very good shape now.
That is terrific. Again, thank you so much. We’ve met each other a few times through the years at various benefits conferences. We’ve gotten to know each other a little bit. We were in San Antonio at the GovCon Maximize 2023 Conference and that was a good one. It was a little different because it wasn’t totally a benefit. It was a very niche-specific thing that I’m hoping to get involved with here in New York. There’s a lot of opportunity to help government contractors.
I’ve been in the business for many years and in 2017, my entire approach to benefits changed after 25 years at the time and it was because of data. I was the expert. I sold insurance, was great at renewals, and down to the single digits every time without a tremendous amount of watering down benefits. I never knew why. I thought I was fantastic. Maybe to some extent, I was under the old formula, but then sometime in 2016, I saw some data that I don’t think I was meant to see and it was the true price of healthcare. That is the true cost of medications versus what we’re paying.
At the time, I had left my GA career and was starting to question the idea of medical trends. From my finance background, I didn’t understand why these huge health insurance companies weren’t able to use their leverage to keep prices down. It didn’t make any sense to me. I started looking at medical trends and what is it. I came across people on LinkedIn like Dave Chase from Health Rosetta and other people. I didn’t like what I saw. You’re not the typical benefits broker. I call myself BO because I want to be a benefit optimizer these days. Was data something that was important and was there some change to your career as a result of it like mine?
Yes, but it was a two-part change. I have been in the employee benefits space for about as long as you have. My family owned a boutique firm in South Florida. We pretty much only did self-funding for mid-size employers, from 200 or so to probably 3,500 or so. That was a long time ago. I’ve been in San Antonio for several years. We could see everything and do anything like you wanted to change this and do this. We did all kinds of stuff. The happiest group that we had was a group of 35 accountants, though. They thought self-funding was great. Those people understood it better than anybody else. That was the best thing for them.
I then moved to San Antonio and into another part of the employee benefits space. Several years after that, I pivoted back into working with a carrier that did its level best to destroy my million-dollar book of business. It wasn’t personal, but it felt that way. We’ve all had that experience. I entered the enrollment space and I’m so not suited to that space. I thought, “I have all these clients and I could fix that problem and that problem. Why don’t I go do that?”
Most of those clients were referrals from other brokers. I didn’t want to do the reputational damage. I built a book from scratch which is hard. I fixed a lot of those things. I can’t fix everything, but I can fix a lot. I did that by getting people to vendors who have a financial responsibility to the employer and not to their stockholders and not to each other, which is one of the biggest problems we have.
That’s very interesting. You’ve seen the data and have been exposed to it for a long time. Being a GA, I sold mostly fully insured plans for under 1,000 lives for the most part through the brokers that I worked with. You got numbers. They’re very different when you think about numbers versus actionable data. A fully insured renewal gives you a lot of numbers. It’s totals and percentages. It’s meant to be confusing and it very often is. The majority of the brokers who I was helping sell employee benefits weren’t benefit experts. That’s why they used someone like myself.
We accepted the numbers. We assumed that the insurance carriers were getting discounts. Back in the day, they did. Somewhere in the last several years, they stopped trying to get discounts. There’s data and then there’s actionable data. Data is a lot of information that you could throw at someone, but it’s useless. There’s way too much. An example of that would be some of the price transparency, like hospitals and insurance companies releasing data that you can’t even download it. It’s so enormous. It’s not user-friendly at all.
There’s actionable data. The term actionable data is often used in contracts with big data. While big data refers to large sets of data that may be difficult to process and interpret, actionable data is a specific subset of that data that could be used to make decisions. To me, that was the most monumental change when I was exposed to actionable data. I saw how we could use that. You knew it. I was already very comfortable with my career at the time and I thought, “This is what I’m going to do for the rest of my life.”
When I saw the data and it wasn’t just the data, it was how that data made me understand how the decisions that we had been helping employers make for the previous twenty years were harming their people. Over the years, I’ve had thousands of open enrollment meetings that I helped conduct and hundreds of people cried on my shoulders because I always offered to stay.
For me, it’s about the people. I love people. I felt so great about going to open enrollment. I finally get to see the people that I help all year long. I realized I was the grim reaper. I wasn’t a superhero to them. I was the guy who always delivered pay more and get fewer results. That was hard for me to live with. I then realized the reality of what we were doing and how changing a copay by $20 doesn’t seem like a lot, but for some people, that’s a lot of money.
Do you talk about how actuarial value impacts a health plan and how that has little to nothing to do with the cost of care?
I wouldn’t say so. Elaborate on that.
I do some consulting in addition to brokering business for our clients. I’ve sat in a number of consulting meetings where I’m the consultant and I’m not the broker. I’ve worked with a number of brokers that come out of the actuarial side and I’ve seen them sit in front of renewal and employers say, “It’s too much. It’s this and that,” and watch them calculate how they could change a copay, a deductible, an ER copay, a physician copay, or a prescription copay, maybe tweak the max out of pocket a little bit, get 2 or 3 percentage points of actuarial value out of that, and drop the employer premium to where they wanted to be, but the only thing you’ve done is irritate employees.
I understand what you’re saying now. There was a company that had very impressive software. I subscribed to it a few years ago. You could plug in changes based on actual claims. For example, changing a copay from $10 to $20 or $20 to $30, whatever. You get a decrement. You get some rate relief on a fully insured plan, but is the impact on the members? How many of those copays are going to be utilized? Is there a value in making that change? What’s the reward? What’s the breakeven? I see what you’re saying.
You’re getting the premium cost but you’re not changing the cost of care. If you’re not addressing the cost of care, you’re never going to change the premium equation.If you’re not addressing the cost of care, you’re never going to change the premium equation. Click To Tweet
That’s the thing when you’re focused exclusively on premiums, which most employers are, unless you’re self-insured, you’re almost entirely waiting on standby to get a renewal delivered to you. I have a renewal from back in April of 2021. They’re a fully insured group. This group has 220 employees and maybe a total of a little under 400 total members on the plan. If you’re experience rated and you’re fully insured by your insurance companies, you’re going to get the prior 12 months versus the most recent 12 months, total medical cost and total RX incurred claims. In this particular group, they have a lot of claims, but this is completely useless.
I know a longtime ex-underwriter of UnitedHealthcare. He was the lead underwriter. He called himself the Chief Revenue Officer because it’s all BS. None of these numbers mean anything. It’s not that the medical claims and the pharmacy claim aren’t accurate, but the pool claim is a real number. I compared four different renewals to similar size groups from the same month and none of the trend factors, the claim pool waiting, and retention were the same or the numbers that the insurance carriers work.
The only number that’s important for them is the bottom number. They wanted to start at 16.3% here. Underwriters work backward and depending on the broker and how sophisticated the broker is or how difficult the broker can be, that number’s going to change. If they know that you negotiate hard and come back six times, that would start with maybe 25% for someone like you and me instead of 16% because they know you’re going to get them down to a certain number and they want to paint that picture. This isn’t data. This is justifying a renewal. They start at 16.3%. The underwriter has a certain flexibility and they know that if you get it down to 7%, that feels like a win.
Even though it’s a win for the insurance company.
That same underwriter that I’ve spoken about has shared with me their biggest losers as far as loss ratio and clients can be their biggest winners in revenue. Not necessarily for the insurance side of the company, but if you think about the United Group umbrella, that includes OptumRx, Optum Analytics, and the OptumHealth Division which is the employer of more nurses and doctors in this country than anybody else and they’re getting into the medical side of thing. What is the actual loss ratio for this group for the United Group of Companies?
I want to focus on the pharmacy. $966,482 in RX claims in a 12-month period. This is a company with 249 subscribers. That’s $1 million in RX claims from 2019 to 2020. This was even partially overlapping with the start of COVID on March 2020. It could have been worse. People couldn’t even get into the doctors in some cases.
Another is an example for the consumer. That’s why we’re having a conversation. I’m hoping HR people, CEOs, and CFOs read this. This is a slightly smaller company with its claims data or actionable data on prescription spend. This particular client was self-insured with Aetna and we were the broker when they were self-insured with Aetna. It took us a couple of years to convince them to move from Aetna to an independent TPA.
You mentioned controlling and changing things. We needed to make that transition so that we could have control over the plan document partner with an independent TPA that has an aligned incentive, they’re making money for providing a lot of value. The value that people probably think they’re getting from their insurance carrier, but they’re not and not worrying about their stock price or their shareholders’ pressure.
This particular group has about 220 employees. This is alarming. People haven’t seen this, but not a huge company. They had 2,370 approximately scripts over a 12-month period. That’s a lot of prescriptions. This is not unusual though. This particular group has paid $302,000 in claims. That would be the number that would’ve been on another exhibit that we looked at.
This is the year after we moved them to an independent TPA. The prior year, their claims were $600,000 with Aetna in pharmacy. They were with the company, but they were self-insured, so we could get the data. It wasn’t being shared with us regularly. It took several weeks to get the data, but they finally did give it to us.
It’s $600,000 worth of claims spent and we gave it to a couple of independent TPAs, which I’m sure you have your preferred vendors in that world and gave it to them. They estimated that they could bring the cost down by about 54% and then they showed us why. We were like, “That’s a big number. We’d be happy with 30% or even 10%.” Wouldn’t you want to save 10%?
Lo and behold, the year one result was a 50% reduction. We did not change the copay, plan design, or medical plan design. What’s interesting is that they had one member who was a perennial large claimant and that’s $600,000 a year. There was a laser on this person. They had a $600,000 deductible for that one member. You can’t hide that. If you don’t have the laser, you’re paying a higher stop-loss premium, so why do that?
That member’s claims dropped from $600,000 to $180,000. We found out that that person was on a medication that shouldn’t be covered at all. It’s free if you don’t have insurance for it. I wouldn’t have known that. This is what the data is. This report gives you the cost of the medication, what they paid for the medication, the members’ copay for the medication, how many pills, how many refills, how many months, how many members, and all of that stuff.
We’re sharing the data with the employer, but we’re not giving it to the employer and saying, “Do something with it.” That’s the difference. That’s why someone like yourself understands why data is so crucial because isn’t it about making informed decisions instead of throwing a copay change at a group?
That is my point. A copay change may get you where you want premium-wise, but it’s not going to help you in any other way. It’s going to irritate people. If you can arm people with information, people will respond in their economic interest. We changed one of our clients from PBMA to PBMB in 2023. I had two experiences in the second week of January.If you can arm people with information, people will respond in their economic interest. Click To Tweet
The first one, I got a call and it was, “I just picked up my prescriptions and something’s wrong.” I thought, “Not already.” It’s somebody I know well. I said, “ What’s wrong?” She said, “I picked up my four prescriptions and paid $23. I didn’t pay that before.” “How much did you pay?” “$80 something.” I said, “I’m not seeing the problem.” She said, “Something’s wrong. This cannot be accurate.” I said, “Did you pay? Did you give them your credit card?” “Yes.” “Did they give it back with the prescriptions?” “Yes.” I said, “You’re good.”
It was all generic medication. That family is a middle-income or higher middle-management income. The result for that family is that she now gets a 90-day fill rather than a 30-day fill. It’s more convenient for her. The 90-day fills don’t cost $60. They cost less than $60. That’s actionable for them. I had another member call me and say, “I’m trying to fill my Singulair and it’s $49.” I said, “Singulair or generic?” She said, “Generic.” I’m tapping on my phone. I said, “Are you at Walgreens?”
She said, “Yes. How did you know?” “It’s the most expensive place to fill that drug. If you would like to go to Walmart, H-E-B, which is a local retailer, or Costco, it’s between four $4.40 and $7. She swore and didn’t believe me. She took it next door to one of those places. She’s like, “I didn’t believe you and you were right.” Again, $49 to about $5 is meaningful for many people.
I’m so glad you brought that up. We don’t do what we’re doing now because it’s easy. We also don’t do what we’re doing now to save companies money. We’re able to do it because we’re likely to save companies money and they’re going to give us the okay, but the approach that we’re taking is about using the money that you’re making to invest in your people work for your people.
The first group that I mentioned had about 250 employees on the plan. In 2021, their premium was $4 million a year of which $1 million was medication. They have no idea. They think that because they’re using the largest insurance company in the country, they must be getting the best prices and the biggest discounts, but they’re not getting that. Those companies are using their leverage to maximize profits. They have to, at least, give the impression that they’re working in the best interest of their people. The reality is they’re not. You can’t hide the facts.
I call what you described CQI, Constant Quality Improvement. PBM for you out there that might not know, it’s a Pharmacy Benefit Manager. Every insurance company out there has their preferred pharmacy benefit manager that usually they own or are owned by. This might be a Texas term, but they’re in cahoots with each other.
There are very good reasons that CVS bought Aetna and not the other way around.
What you’re also not saying is that the fact that the cost of healthcare and the cost of prescription medications is not the same with the same insurance company every place you go. They have different deals with different vendors like Costco, Walgreens, CVS, and Walmart. All of these places have different deals with these insurance companies because they’re in a partnership. They want to get people in the door, fill prescriptions, get medication, and drive people not to where the quality or the cost is beneficial for the member. It’s where it’s beneficial for them and their deep pockets. That’s what the data shows.
It’s hard to see this data for the first time. I completely get it. I’m typically the first advisor that’s sitting down with an employer to have this ugly conversation. They’ve been groomed partially by benefit brokers like myself over the years who were selling an insurance product that wasn’t a great product and there wasn’t a lot of value, but it was simple. “Here’s your premium now. This is what it’s going to go up if I tweak these copays,” it’s simple.
It’s like arithmetic versus multi-variable calculus which my son who’s now a rocket scientist was taking in college. I looked at it and I said, “When did they stop putting numbers in math? I don’t get it. What is that?” That’s the difference we’re talking about. At the end of the day, the impact on the members could be amazing. That friend of yours who said there’s a problem because they saved money, that’s so unfortunate because that should be happening every single day.
It says a lot that she thought that there was something wrong. She was certain there was something wrong. She’s a pretty good advocate and consumer. She’s a regular user of care, so she understands how to navigate the system. For her to say, “There’s something wrong,” I pay attention because when she tells me that she’s normally right. I don’t want to say it was heartbreaking, that’s too intense in emotion, but it was sad to me that she thought that there was something wrong because she paid less.
The title of this show is kind of the awakening of the American healthcare consumer. That’s what people are. We haven’t been able to be consumers of healthcare or health insurance because we haven’t seen anything. We’re going along with the flow. We’re going to pay more and get less every single year. That’s the way it is. Let’s move on. Businesses have thrown in the towel because it’s not worth their time to fight this fight, but now you show them the data, you got to knock down the door to be able to say, “Listen to me. This $966,000 in prescription claims is $450,000.”
They’re amazed and sure that you’re doing something illegal. They then get very angry.
Department of Justice right now has all of the biggest PBMs or those pharmacy benefit managers in the country in the hot seat. Maybe there’ll be some legislation to come out of that potentially. Pharmacy is an easy one to share the data. When you described your friend and client who was used to paying $80 something for generic medications and now it’s $40 something, there are a couple of things going on there. Tell me if I’m right. It was the spread pricing by the insurance carrier. These might be medications that are $5 each, but they were being charged $20 each for these medications That’s a spread.
I don’t know if they were self-insured before, but if they were self-insured before, most of the PBMs will charge a per-script fee. A lot of the BUCA, the healthcare-owned PBMs that partner with the insurance carrier or self-insurance divisions don’t charge a fee. “That sounds great. There’s no fee,” but where are they making their money? They’re making their money on that spread price. Your friend may have been paying $80 something, I don’t know if that was her cost.
That was her cost. They have a great plan. They used to have a $4,000 deductible 100% plan and as an insurance person, I look at that, “That’s fantastic.” People hate that because they don’t know what their drugs cost. They don’t know what their office visit is going to cost and they have to pay that out of their pocket. The people that are healthy don’t get cared for. They don’t get their regular checkup. They can, but they don’t. They don’t do their regular stuff because they don’t know what it’s going to cost. We haven’t had tools to help people be good consumers.
As we’ve saved this employer money, they have not reduced their healthcare budget. They have reinvested that back into their workforce. One year they cut their deductible in half and they cut their premium contribution for their employees by 25%. They added a long-term disability benefit. They did that with the money that we found from helping them pay a fair price for healthcare.
They reinvested the waste in their plan. That’s the artificial prices or hidden profits which are now being steered elsewhere. It comes back to the employer. What could you do with that? You can have bonuses and more benefits. You can invest in your company, invest in technology for your company, get your company to be the employer of choice, and be more competitive in the marketplace. There’s so much that can be done with saved money. $400,000 might not be a lot of savings for this billion-dollar company, but not doing something is taking its toll on its employees.
They still look at this health insurance budget that they have now. Their C-Suite or their financial people are saying, “We’ve budgeted 5% or 8%. You need to get down to that number.” Not having access to the data forces the insurance decision of, “We got to 12. We got to find another four somewhere. Show me options,” which means cost shifting to the employees. There are only two ways you can make up to 4% make your employees’ contribution higher or increase their out-of-pocket costs which contributes more to care avoidance, unhealthier population, and higher claims in the future.
Employers are often focused on the biggest discount for office visits and things like that. Let people go to the doctor when they want to go to the doctor. Get them to the doctor. If you worry about the knee replacement costs, the back surgery costs, and the chemo costs, then you will control your costs. There are ways to do that that can positively impact the employee as well as the employer’s budget. We’ve been very fortunate. For the most part, our clients are very aware that their employees are patients when they are interacting with the healthcare system. Not every employer can or does. There are real conversations about how this impacts employees.
You have access to the medical claims and now you have the diagnosis. You have the procedure codes. You see where people are going, the cost of radiology, the cost of ER, why they’re going to the ER, or should they be going to the ER. Maybe they haven’t educated their employees enough to make them understand maybe urgent care is more appropriate for that condition or that particular visit. Maybe the employees need a primary care doctor. We all know that there’s a shortage of primary care doctors. That data on the medical end can show what percentage of your employees had their routine physical in the past few years.
The other thing that it shows is what claims are paid on a CPT code and what claims are paid on a DRG code. For those of you that are reading, a DRG is a group code and a CPT is a specific service code. The easiest example for that is there’s a DRG code for emergency room visits. There are typically five levels of emergency room visits.
If something is billed on a DRG code rather than a CPT code then as long as the price is within the discounted range of the DRG group, the claim will be paid. What that means is you could conceivably have an emergency room visit that was a level 1 or a level 2 billed at a level 5, and nobody will look at that because of the way claims are auto-adjudicated.
We had a client that we did a claims analysis for. They were a large client. They had about 2,500, 2,200, or 2,300 on their plan. They had $18 million billed claims. That’s not what gets paid and over $6 million of that was paid on DRG. If you’re a manufacturer or you take delivery of something, it’s like taking an unverified delivery.
Most of those claims aren’t itemized.
They are not itemized. You have no idea what’s happening. We had another person with a chemo claim about nineteen visits and the notes say, “Dosage specific to the individual. Please check the notes for dosage.” There were no notes in the dosage, yet the claim was paid every time. Conceivably, you have no idea what was delivered to your member. Those are problematic on many fronts.
I had two guests from a few shows ago from Slingshot Bills. They are two brilliant graduates of Georgia Tech. My son went to Georgia Tech. They didn’t know each other, but they graduated the same year. I got on a call with them and I was blown away because here are two young mid-twenty engineers who had great jobs at big global companies.
Zoe Holderness had gotten a bill. It was her first experience as an adult. She goes to the doctor, gets a bill, and she’s like, “What is this?” She’s a numbers person. She looks at it and starts doing research. Before you know it, she’s fighting her claim. She sees that upcoding that you referred to. She was looking at the codes like the procedure code and the diagnosis code. She’s like, “I wasn’t there for anything like that. I went in and got a Band-Aid, and left.”
It seemed as though by the description, it was like a level five description. He walked out of there losing a limb. It was a ridiculous bill in thousands of dollars. She had a high deductible plan, so it was worth her time to fight it. She had the intellectual ability to do it. She then started talking to friends and helping them and their families. They built a company called Slingshot which basically is an add-on to a self-insured plan. They work in conjunction with the TPAs. All of the codes run through their system and identify the up codes and the unbundled bundles.
There are certain things when you go into the hospital and you have a procedure or a certain type of surgery, there’s a bundled rate for that a lot of times. Yet, the facilities unbundle it and they’re charging all of these things. Again, as you mentioned, this universal claim form goes in. It’s like a summary claim form. It’s not their money, why should anybody hassle? They’re going to pay. They found that 60% of the claims that they analyzed had upcoding. I said, “You’re wrong. It’s 99%.”
I’m not surprised at all.
It’s business. People don’t realize. A few years ago, there was a huge dramatic change in the medical coding world. The codes were multiplied by ten times more than there were in the past. That made way for all of these different levels of codes. When you go to the doctor, you’re not just at the doctor. You’re a code.
On average, they spend 7 minutes with you, but they could bill for something that made it seem like they spend 45 minutes with you. They’re very involved. They’re trying to get as much money, especially now that more and more primary care doctors and specialists work for the health systems. They’re not doing their own billing.
The other thing that’s surprising is that doctors have quotas on the number of referrals they need to do and on the number of services that they need to provide. They’re called RVUs. That’s appalling for the doctors and appalling for the patients. The other thing that happens is, typically, if I’m a doctor and I work in a hospital system, I’m only allowed to refer within my system if that’s the right doctor for the patient or not. That happened to my mom. She was referred to a cardiologist with a quality score of 27.8. Now, I’m fortunate enough to have the resource to figure out if the doctor is a high-quality provider or not, but if I’m a regular person, would I even know to do that and that it was possible?
You would google it and you might see, “This doctor has a great bedside manner. The office is clean. The office people are friendly,” which could be the case. There might be a lot of different reasons why that doctor is underperforming, but it shouldn’t be important to the patient. In this day and age of the internet, technology, and Amazon, where you can shop for anything within two minutes, you could find the best price, the quickest delivery, the highest quality, and the lowest delivery fee. When I shop for something, Rakuten pops up and says, “Here are fifteen different codes. This is the best code for you.” You can’t do that for healthcare.
I’m a health advisor and they shared some information with us that 20% of new diagnosis cases are misdiagnosed. They might not have cancer at all or maybe they have the wrong cancer. For me, it is even scarier that you have cancer, but they’re treating the wrong cancer and wasting all of that valuable time. 67% of spinal fusions are unnecessary.
Our friend, Al Lewis, talk about spinal fusions.
He’s too smart for me.
He’s too smart for me too. He says that the number one predictor of a spinal fusion is a spinal fusion.
90% of spine doctors will not have spine surgery. They’ll do them all day long because they can and it’s very lucrative. You mentioned your mom. My mom had three spinal fusions. The third one was to remove the first two because they were done at separate times and left her with a reverse arch in her back that was excruciatingly painful. She couldn’t sit up and it was deteriorating all of these other parts of her body. It took her about two years to find a doctor that would redo the work of the first two. She almost didn’t make it out. It’s very sad.
Actionable data is incredibly powerful. The scope of what it can help us as advisors do is amazing. You mentioned that you have access to a tremendous amount of data. If you build unbundle and re-bundle a health plan the way you do, we’re picking best-in-class solutions and it’s very important they work together so that they’re seamless. It feels just as cohesive as that fully insured plan or that health insurance company.
People don’t realize if they have Aetna, UnitedHealthcare, or Cigna, they don’t have Aetna, UnitedHealthcare, or Cigna exclusively. They have 30 different pieces that those carriers cherry-picked mostly because of profits. Again, they’re not providing that value to the members. Shouldn’t a health insurance company have all the data in the world? They’ve always had it. It’s not new to them. They could have been helping people get the highest value care, meaning the best quality at a fair price all along.
I talk about this particular case all along and it was my first experience after we had successfully taken a client into this new world of benefits that we’re in. I wasn’t even 1 week or 2 into it and I got a similar phone call as you did, but it was big for me. It was a member who was being prescribed medication. At the time, it was the PBM reaching out to me asking me who this member was because to them it was an ID number and asking me to please reach out to the client to let the member know to expect a phone call from our PBM partner because they’re going to start an injectable medication and it’s going to be done in a doctor’s office.
This is not a pharmacy claim. This is a medical claim because of where it’s being done. It’s $115,000 shot twice a year so $230,000 is the price. Based on their best data, the insurance carrier was going to pay about $80,000 for the shot so it’s $160,000. That doesn’t get me too excited. It’s a lot of money, but it is what it is. We have a company called Optimed, which is an injectable medication and specialty med provider. They’re sitting in the background and we’re sharing the data with them.
Again, it’s a data feed that comes through them. Pre-certification comes in through the network that we’re renting and it triggers them. They come back to us and say, “Here’s the deal. It’s a medical claim. If this person who turns out to be a 29-year-old young man who’s on disability with two young children, if he goes to the doctor’s office, it’s going to cost him $7,500 because it’s going to apply towards his deductible and his co-insurance.” That’s the way it would’ve happened for the prior 25 years of my career because it always happens after the fact. You go get the shot and find out three weeks later when you get the bill or the EOB.
Instead, “Let him know that we can offer him and we’re not mandating it.” We would like to potentially, but we still want to give people choices. We want to use positive incentives based on the data to get people to change their habits. “We’re going to reach out to him and let him know if he agrees to utilize our source of the medication that will be done in his home by a registered nurse or nurse practitioner and it will cost him nothing.” For me, that’s what matters. It’s $7,500 for this young man with two kids. That’s meaningful unless he won the lottery. We are also going to save the plan $100,000 because instead of $80,000 a shot, they source, administer, deliver, and make their piece on it for $30,000 each shot.
That last thing that you said there is very important, that they make their peace on it. Business is business and it’s here to be profitable, but we have a saying in Texas, “Pigs get fat and hogs get slaughtered.” It’s all right to make money but to be egregious on the back of others is maybe the American way but we don’t need to do that all the time because Optimed makes plenty of money.
You can bring value and make money at the same time, but shouldn’t you make money based on the value you’re providing? What most bothers me about the state of healthcare and health insurance is that there’s no hiding the fact that the consumer has been deliberately kept in the dark. If they hadn’t been deliberately kept in the dark, we wouldn’t be where we are now, where we’re looking at $3,000 family rates on a fully insured small group plan in New York. $1,200 a single for a gold plan. We’re not even talking about the highest-level plans. The New York work community rated up to 100 employees. You can’t use stop-loss.
What’s nice about the data is that data has helped us develop strategies and solutions for those small groups. I can’t change the premium. If you’re in New York City and you’re buying insurance on June 1st, you’re second quarter 2023 small group, it is what it is, but I can help an employer better use that money to appropriately ensure their employees.
I don’t know if you’ve thought about this, but I’m sure you probably have. Again, it’s about the data. Because there’s no access to information, most employers are over-insuring their employees. They’re thinking about whether I got to keep the copays and deductibles because there might be a few people that use that.
What we’re trying to convince people and HRA as a good potential strategy for small group employers is to buy a less rich plan and use those premium savings to reimburse or refund your employees for healthcare, but not just any healthcare. Let’s couple that with navigation. Just because you’re fully insured doesn’t mean that you can’t build a high-performance health plan to the best of your ability. Most importantly, get your people to the best doctors. I love plugging in some of the vendors. There’s a company called Garner.
They do very good work.
It’s different but you have to understand the data to understand the value of a company like that. I don’t know if there’s anything that we didn’t touch on that you wanted to discuss. Is there anything that you guys are doing with the data that we didn’t get a chance to mention?
It’s important to convey this to employers. You did this when you talked about Garner Health, that even if it is in your best interest or your only option to remain fully insured, it doesn’t mean that you can’t understand what’s happening so that somebody like you can negotiate a better renewal and understand what your options are and make them work in a way that works for both your budget as the employer and what employees need. I don’t care if you’re a group of 2 or 1,000, fully insured, self-insured, or level-funded, whatever it is, you can get actionable data in 2023 and make better decisions. You just need somebody willing to walk the walk with you.Get actionable data in 2023 and make better decisions. You just need somebody willing to walk the walk with you. Click To Tweet
On that point, there are technology companies that cause a lot of problems but also can solve them too if it’s used right. There are companies that can help us with claims harvesting.
That’s what you need.
You can make an informed decision even in a fully insured group. It’s a little bit of work to get, but isn’t it worth it? I did an analysis of a 50-person group here in New York with a gold plan is $1 million dollars a year in premium, 30 singles, 5 couples, 5 parent-children, and 10 families. It was a real New York small-group rate. If you double that, a 100-person group could still be in the small group market. That’s a $2 million investment. Don’t you want to make sure you’re making that investment for the benefit of your employees?
We are in a different healthcare cost market than you are and that is a regional thing, but we have a group of 150. Their claims and plan administration do not cost $1 million. That’s mostly singles, but there are some families, some spouses, and employee kids. There’s that whole good mix there. They do not spend $1 million a year. We worked hard to make sure they don’t, but they do not.
It’s about wanting to be an informed consumer. There’s no one that likes what they’re paying for healthcare and insurance now, but what we’re trying to do and I’m sure you are as well, is find people that will roll up their sleeves and work with you to do something about it. That’s what it comes down to. You can help anybody and would help anybody because I know what an amazing person you are.
Thank you so much for spending time with me. Especially if you are on the West Coast, reach out to Allison. There are people like us throughout the entire country. There are some great people in every market imaginable. If we can’t help you, we know someone who can who’s an expert in that area. It can be very local. In healthcare, the problems are universal that we’re all talking about. Thank you so much. I hope to see you at an upcoming conference.
Thanks for having me. I’ll see you soon.
Thank you. Take care.
- Allison De Paoli
- Slingshot Bills
- Zoe Holderness – Past Episode
- Garner Health
About Allison De Paoli
For more than three decades, Allison De Paoli has been chipping away at the healthcare crisis, leaving in her wake many happily surprised employers finally in control of their healthcare spend.
An active player in the employee benefits industry, Allison is the founder of Altiqe Consulting, a boutique consulting firm that helps employers reduce, hedge and leverage their healthcare spend.
She is a co-author of the Amazon best-seller, Breaking Through the Status Quo:- How Innovative Companies Are Changing The Benefits Game To Help Their Employees And Boost Their Bottom Line, and a columnist for Employee Benefits News and a regular contributor to Employee Benefits News.
She speaks nationally to broker groups and employers about transforming the healthcare spend from an out-of-control cost to a meaningful investment that meets employers’ business objectives.
Allison has been recognized as the YOUPowered Most Innovative Healthcare Consultant for 2022, the Next-Gen benefits Advisor of the Year for 2022 as well as making Benefits Pro Magazine’s list of Top Women in Advising (2019).
She is active in her community, serving as Chair of The South Texas Blood and Tissue Foundation and on the boards of The Family Service Association and The National Association of Benefits and Insurance Professionals, San Antonio Chapter.