You are currently viewing S1:E14 | Benefits With Friends – E14 With Our Guest Aaron Witwer
Lou and Aaron had a great conversation on the topic of the ‘Functionally Uninsured.’ Managed Care’s promise of enhancing care and controlling insurance costs clearly expired long away.  Instead, it was replaced with Pay More, Get Less and numerous flawed strategies.  Employers and their members fell victim to a health care and insurance system that on the surface seem broken.  A keen eye understanding that they are, in fact, working exactly as designed to the benefit of these two monopolies. Aaron discussed the distinction between equity and equality and how the plans offered by many employers today leave the lowered earners in dire straits. In fact, an overwhelming majority of hard-working Americans have less than $1,000 in the back, yet they have deductibles and out-of-pocket costs 5 to 10 times that each year. One solution that Aarons firm, E Powered Benefits, has had great success with is Direct Primary Care which eliminates barriers to care and offers a superior patient/doctor experience. Thanks for listening!

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Benefits With Friends – E14 With Our Guest Aaron Witwer

Thank you for joining us if you are out there. We have an important topic in this episode. We are going to be talking about the functionally uninsured. A guest with me I have known for a few years, Aaron Witwer from E Powered. Let’s bring Aaron into the room. Aaron, how are you? I’m well. How are you doing? It is too important a topic to waste any time. I need to get you right in here. For those of you that are new to the show, this is our fourteenth episode. Aaron and I are involved in some employee benefits health insurance advisor consulting organizations. We have known each other for a while. If you are new to the show, I’m Lou Bernardi. I am wearing this ridiculous shirt because I am the benefit optimization officer. Formerly insurance broker and general agent. I coined the phrase because it is important that we change our mindset, especially on the employer side of what we are purchasing. Far too often, we think of that we are buying insurance. You are not buying insurance. You are buying access to healthcare for your employees. Aaron would agree once I give them an opportunity to talk. We have gotten off track. We have allowed managed care over the last several years to take us somewhere where we don’t want to be. High premiums, excessive out-of-pocket costs, and too many functionally uninsured people. This show is about sharing what we have learned. We have dug in deep. The last several years have been very new, challenging, and exciting. I found a lot of great people, companies, and solutions. I can’t wait to share those. If you are a benefit decision maker and you are frustrated with the status quo, you feel stuck, and you have no choice but to accept insurance company premiums, you are in the right place. I got a great guess. I don’t know how I got Aaron. He is from E Powered Benefits, one of the premier benefit boutiques. He is doing things differently. Aaron, I’m going to shut up for a second. I allow you to introduce yourself and take it from there. A lot of us are different these days, it feels like but still not enough for our liking. Thanks for having me on. This is fun. This is like chatting with buddies. This is how you get stuff done. We have met each other a few times. We are going to be together again within the next couple of weeks, maybe EBN, whatever. It is online. When I reached out to you and said, “Would you like to be a guest on my show?” You jumped on the opportunity and immediately said, “This is what I’m passionate about.” Functionally uninsured people. That is not a new term but I’m not sure that we spend enough time talking about it in the war rooms when we are talking to CFOs, CEOs, HR Directors, heads of people, or whatever terms. We are not talking about that. We are focused on, “This is what we have now. This is what our insurance carriers were presenting us. This was our claim. It justifies this increase.” What do we have to do to get to that targeted renewal rate that comes from the C-Suite or the finance department within companies? I don’t think enough people are saying, “Is what you are offering functional or meaningful benefit for your employees and their family?” I’m going to let you elaborate on that because you say it eloquently. I’m trying to change the conversation a little bit with the C-Suite, as you alluded to. You don’t even want to be talking about insurance now. Let me frame how much different this is going to sound. I want to start with the idea that you have people who make a variety of salaries and incomes at your company. What we haven’t been traditionally good at is leveling the playing field. Everybody can have access to primary care and high-quality primary care. There are a lot of conversations about it. Everybody has access. Everybody got the plan. It is a PPO plan. It is on. It is not equitable about that. It is the definition between equality and equity or equitable healthcare and equal. There is this great graphic out there. If anyone types equity versus equality in a Google search, the first image that will come up is three people standing on boxes looking over a fence. These three people are of different heights. If you give everybody the same size box, some people will still be able to see over the fence, and others won’t. What equity suggests is that you give each person the size box that is necessary for them to see over the fence. That is what equity is.
Equity means giving each person the size box they need to see over the fence.
That is a harder concept for folks because it doesn’t feel fair. They got more than I did. They got something different than I did. What it means, and what we understood, unfortunately, over the last few years, is that we can’t talk about equality. We need to talk about how we meet people where they are. We like to say things like that. Where they grew up? What are their transportation needs? What are their educational needs? Are they health literate? Do they have access to quality care? Do they have access to care? We need to try and level the playing field. Luckily though, which is the only reason I got into talking about health insurance, is that these types of plans that you and I talk about on a regular basis, Health Rosetta advisors talk about, can be equitable. They are designed that way by a standard to say, “What we do on our plans now 100% of the time is here is a direct primary care provider. Every single person, no matter how much money they make. Here you go. It is built into your plan.” That means there are zero copays to see that doctor anytime you want. Call or text them, whatever means works for you, the human being on the plan. That, to us, is important, which is why I like to try and reframe those conversations with the C-Suite and our colleagues, too, to say, “Remember what you are doing here.” This isn’t about selling a better model of health insurance. It is not about that. It’s about that you are providing better healthcare for all these human beings. It can help people be energized to talk to the C-Suite about something they probably don’t want to talk about anyway, which is deductibles, copays, health insurance and all this other stuff that doesn’t fire people up. When I saw the cost for the first time several years ago, it got me questioning everything. These are our trusted partners and advisors. No one is to blame but everyone is to blame at the same time because we all fell into this trap that we stopped questioning. The lack of information over a period of time gets you to think, “I have to believe that I’m with this carrier. They are doing the best job because they are enormous. They must be getting the best prices.” They may have been a time when that was true but more than what you and I see behind the card, what we are trying to share with people is that they are not getting the best prices. They are getting the best profits. I was on a show with Eric Silverman, and it popped into my head. It is like an English muffin. From the outside, you see all of the cornmeal. It is consistent. If you slice it open and look inside, all those nooks and crannies that are in there are all the opportunities to hide profits. We are misinformed or under inform that it is deliberate. You mentioned direct primary care, and probably not everybody that is out there is familiar with that concept. A lot of the people that I invite are here in the Northeast. They have limited access to direct primary care doctors. There is one on Long Island, Dr. Blyskal. I’m going to have her in one day. I have to get her on. I sought her out as a broker. Direct primary care doctors, for those of you that don’t know, are doctors that are fed up with the fee-for-service managed care model. They gave it up. They do not work with insurance companies. They don’t submit claims. You pay a reasonable monthly fee, from what we have seen, anywhere from $65 to $100 per month on average. That is your doctor. Every state allows them to do a variety of different things. It’s everything a primary care doctor can do, plus some things that specialists can do. Depending on the facility, they have internal testing, some radiology work, and things of that nature. The importance of it is that they are now your guardian. You don’t spend five minutes with them. You generally spend no less than 30 minutes up to an hour. There are no waits. Their appointments run on time. They do not have to have people in their offices. Ours doesn’t even have a receptionist. There’s no need for one. When we met her for the first time, and I walked into this office with my daughter, I sought her out for my daughter because my daughter has been treated for a variety of different things for a long time. Nothing helped. We spent five minutes with the doctors. They increased her medications. None of them got to know her. Within one week, my daughter had about fifteen different interactions with this doctor. She made her years’ worth of compensation in one week over every prescription. It is something I know is growing. I’m a Forbes Business Council member. I was on a call one time. When I mentioned what I did, I mentioned the term direct primary care. I was referring to this whole entire ecosystem of healthcare that people don’t even know about. All of these finance people from Forbes jumped all over this and said, “What is that?” They see so much private equity money entering that space, which is reassuring because we know there is change coming. I’m a little less excited about private equity because of the profit motive but its core is such a great thing. It is different. We haven’t found a way to embed it into all of our plans because it is limited. We are talking to people every day about that because, fundamentally, there is no care in healthcare. There is no benefit in employee benefits anymore. We use these terms as if they still exist. I’m not trying to bash anybody. I completely understand how employers got from a $5 copay to a $7,050 deductible. $14,100 for an HSA-compatible health plan. Is that insurance? Are you going to avoid care? Absolutely. We rebranded the company, our whole approach, and our strategy. Everything about what we are doing is different and focused on the members. When I had time to reflect, when I left the GA world, I reflected on all of those personal interactions I had at the end of the open enrollment meeting. I said, “I will stick around for any personal questions that you don’t feel comfortable bringing up in front of the group.” Those are the ones that haunted me. I went from feeling like Captain America. I got my little Captain America glasses here. I felt like I was doing such a great job. Those moments that I reflected on after having the hindsight of knowing all of this profiteering is happening. These people are crying on your shoulder. It doesn’t seem like a lot to many people but all we did was change the copay on a prescription from $10 to $25. That $15 difference means a lot of people these days. They are already deciding which prescriptions to take. There are people out there with 10 to 15 prescriptions a month and more. They are costly sometimes. These are all the causes of why people are not getting healthcare. This is how it is not equitable because you think that whoever is making the decisions, oftentimes, doesn’t believe that a $2,800 deductible is a big deal. You ask the right people about their savings and look at the data about how much money people have in their savings accounts in this country on average. Those people are not being attended to. $2,800 is tragic. It is a big deal for a lot of families in this country.
BWF S1 ep 14 | Functionally Uninsured
Functionally Uninsured: Never believe that a $2800 medical deductible is not a big deal. For many people, that is the only amount of money they have in their savings accounts.
I looked it up a short time ago. You level it out. The median was $5,000. The average is much higher. You are talking about billionaires and millionaires. You got to take them out of the equation. I saw somewhere that as much as 70% have less than $1,000. That is the stat I have seen in there. This was in something published about Ohio, which is the state I live in now. There are a lot of rural areas and cities in Ohio but for it to be anywhere between $1,000, $2000, to $3,000 of savings puts people in a real bind because their deductible is their savings. They are going to avoid all the care they possibly can. To be seen in the research, it influenced their preventive care, which is also free either people don’t understand or they are afraid it might not be and what if you don’t. That, in and of itself, is where I started the conversation about your plan isn’t equitable. I’m not trying to call you out as the CFO or VP of HR. I’m telling you, we are going to design your plan differently. If that sounds appealing, let’s keep talking because that is the only way we are going to do it. DPC, Direct Primary Care, is a brilliant starting point. You can go for as much as you said and as much as you want. Think about those numbers I gave you. If you are doing it on an employer basis, it is even less expensive generally. We did it individually for my daughter. It was something that we needed this particular doctor. I couldn’t absorb that many because there is such a limited supply here. Let’s say $50 per employee per month to pay. It sounds like a lot of money when you add it up. If you think about it, I’m sure that what you have seen is that the end result is that you are avoiding other unnecessary care tests. These doctors have no misaligned incentives. They are not beholden to the healthcare system and the hospitals. They are not told what to do. They have no quotas. I always think about driving around at the end of the month. You got to slow down about 5 miles an hour because those police officers out there have a quota to meet on their tickets. I don’t want to be that guy. Doctors work the same way.
BWF S1 ep 14 | Functionally Uninsured
Functionally Uninsured: You are avoiding so much other unnecessary care. Doctors have no misaligned incentives and are not beholden to the healthcare system. Meanwhile, hospitals are not told what to do.
We have a great doctor that we have seen. It is a specialist. I’m writing a book. It may or may not ever be finished because I’m a procrastinator but my doctor, I’m going to call him Dr. B, was going to be in my book. He is an unbelievable doctor. I went to him for the first time several years ago. I needed my colonoscopy. As a gastroenterologist, he spent 45 minutes with me talking about my health and weight. I said, “I’m here for a colonoscopy.” He says, “Yes, but that doesn’t interest me. You interest me. I want to know more about you.” I was like, “This is insane. People don’t get this.” I went back several years later because there were some precautions he was taking. I was good but the healthcare system sign was on his building. I walked in. I said, “Dr. B, what did you do? You sold out.” He has two practices. He has his specialist office and outpatient surgery, where he does all the tests and everything. He says, “I partnered with the healthcare system. I have not gotten almost not a penny anymore in several years. Immediately signing that piece of paper that I’m with the healthcare system. They are doing negotiations for me. I got a 20% or more bump on all my services.” He says, “How couldn’t I do it?” I said, “They are not going to be happy with you because you are still spending 45 minutes with me. It is who he is. I am sure you are not hiding the numbers. At the end of the year, they are going to be unhappy with you. I’m interested to see what happens when I go back another couple of years from now if it worked out.” It is a different world of healthcare. You can look through it with a different lens. When you bring someone like you, which most people probably don’t even know exist, there is not enough booze or advisors that are doing things differently. The way I look at it is that we are bringing the solutions that need to be brought to people, not what they are asking for. A lot of times, they are not ready. I am sure that probably 80% of the people you approach and talk about direct primary care have never heard of it before. They have no idea. Sometimes it is a 1, 2 or 3-year conversation where all of a sudden, for me, the important thing is that I want to be memorable. I want to be the boo. I want them to when they get their renewal, that 20% renewal that they settle 8% in 20%. At that point, they were like, “Who was that person?” They will remember boo. They are not going to remember Lou Bernardi. That is what is happening. What would you think about the economy now and the uncontrollable things? Other parts of the country are probably even worse. It cost me $4.99 for regular gas. I can manage that. A lot of people can’t. They have to do it. You can’t boycott. Some people’s jobs require them here. We have a lot of mass transit but still, the highways and the byways are full in the morning. You can’t avoid that. I renewed my gas, oil, furnace, fuel oil, and heating oil. I was paying $3.69 a gallon last 2021. My company wanted to renew me at $6.20. We are going into the summer. That is not a big deal. This isn’t going to be resolved come November or December. What are people doing to heat their homes? How many people aren’t going to be able to afford those tests? Unfortunately, it is avoidable until it is not. We don’t want that direct primary care. There is no barrier. What is the barrier? There is no cost to that person. It is a transportation issue at worst. For anyone that is reading this and isn’t quite sure what it is, one of the absolute best parts of it is that they don’t want you to come into the office often. They want you to call, text or video chat them. You only spend the amount of time that is necessary. There is never any overutilization. There is no extra driving time. There is no coming in and going, “I could have done this over the phone because I already know who you are.”
Direct primary care doesn’t require you to go to the clinic often. You can simply call or text them without extra driving time.
It levels the playing field. There are zero excuses. Transportation is not nothing but otherwise, zero excuses not to have a call with your doctor the same way you would if your brother or cousin is a doctor. When you think your kid is sick, that is who you call. “Cousin Bob, little Josie has an ear infection.” “Ask for this and this. Send her to CVS. Go to the drugstore, and we will get it figured out.” That is how it should be. That is what it is like for these direct primary care plans and direct primary care offices all over the country. Some more densely than others. You are in one of those tough areas. We have seen other areas like that. It does cause some hurdles. I am dug in. Sometimes it hurts but I am going to see this through. We are going to build centers. Not me, personally. I am handy. I could lend a hand with that. I’m going to talk to as many employers, and build shared DPC facilities. We need 1,000 members to get that going depending on the companies. People understand. A smart, savvy business owner understands that not only is this investment going to save them money over time. It is going to create a healthier and more committed workforce, lower turnover, and all these things. My oldest son had severe heartburn and acid reflux. We went to the doctor, and I had to take off work. Several weeks later, the doctor wanted to see him again. We spent five minutes with the doctor, and I had to take off work again. We saw the doctor for six minutes, and says, “How is it going?” He was like, “I want to see you in three weeks.” I lost another day’s work. The employer lost a body. He is a contractor. He is a steamed fitter. I’m sitting at a desk. It is real work. He lost labor out of someone like my son is significant money. He wants to see him again. He wants to do another test in six months. My son says, “Since I have been on the prescription, I haven’t had a problem. If I take it, I’m good.” People don’t understand when we think about the term fee for service. Your doctor, most likely primary care doctor specialist, only gets paid when you see them. They will create reasons for you to see them because they want to get paid. As opposed to a direct primary care doctor that says, “I’m going to see 1,000 patients, not 5,000. I’m going to collect $65 from 1,000 people. That’s $65,000 a month with much lower overhead. That is not bad. There are expenses for earning offices and liabilities. This doctor was chill. I was in amazement. I will be 55 this year in September 2022 from Brooklyn, New York. My doctor, Dr. Zimmerman, lived two houses away from us. His office was on the first floor of his house. You saw him every single day walking around with his leather briefcase doing house calls. He knew everybody by name. He cared. These were his people. Doctors want that. They want that relationship. They want to help people. They want to keep people well, not treat them and earn money. Not to keep them sick. I hope doctors aren’t looking to keep you sick. They are looking to run an office. It is an expensive proposition. Dave Chase from Health Rosetta always throws out the number. Only $0.26 out of every $1 spent on health insurance or healthcare goes into the practitioner’s pocket. There is so much waste. It is insane. You think of my chiropractor giving up. My chiropractor said, “I have to do much paperwork to justify people coming here. We won’t do it anymore. Give me your copay. Give me $30, and I will crack your neck.” He hates when I say that. It is a lot more than cracking my neck.
BWF S1 ep 14 | Functionally Uninsured
Functionally Uninsured: Only 26 cents of every dollar spent on health insurance or healthcare actually goes into the medical practitioner’s pocket.
Are there any other things you could say? We spend a lot of time talking about direct primary care. I call them members when they enroll in a plan but it is patients and people because when they go to use it, they get surprised. One of our clients calls me. It is the HR director for a company. She got an ER bill. She was surprised by the balance bill. After the insurance was paid, she owed several thousand dollars for an ER vision. When she conducted open enrollment, which she helped us set up. We did it electronically through a portal. She selected the mid plan, probably based on the per paycheck contribution that she was asked to make and didn’t look at the fine print. It was right there. It wasn’t like it was hiding behind an eight-page summary benefit to coverage. Emergency room, subject to deductible and co-insurance, $3,000 deductible, 50% co-insurance. She went there. It is something that could have been handled at urgent care and most likely could have been handled by a direct primary care doctor. It didn’t seem like an emergency but maybe at the time, that was the only option. People don’t have a primary care doctor. They don’t have anyone they can call and ask like, “I don’t know if it’s an emergency or not. Who am I supposed to call? I just go.” You got to wait three weeks to see your direct primary care doctor if you haven’t given up on that person yet. People have been using urgent care as they are direct primary care doctors, and I get it. They are open 24 hours a day but they are convenient. There is a little bit of a wait but they are money-makers. They are owned by the healthcare system. It is not a relationship like you were talking about before. That is one of the major downsides to people relying on these retail offices or in urgent care to get a lot of that care. You can get it, and it is more efficient but you are not building a relationship. You are not creating a medical chart that someone can tie back in and learn who you are like Dr. Zimmerman on your block. That is important. It does make a difference. We work with 45 DPC offices around the country, from Tampa to Anchorage, Alaska. They are all over the place. Some of them are more spread out than others. My point in bringing that up is that they want to go back to what Dr. Zimmerman is doing. They won’t take some of our patients on until they have onboarded them. They have had deep discussions. They have said, “You are in my practice. I know who you are. Let’s proceed.” I can’t say like, “Here are your eight patients from this new client.” Most of them will go, “Hold on, let’s make sure we are a good match for each other.” That was refreshing to have to do and to be forced to do that for the doctor but all for the patient’s benefit, overwhelmingly. Imagine if that was the clause that everybody followed. I can’t reiterate enough. There are many different solutions. We did have a question, “Will this recording be available?” Yes, this will be available on LinkedIn after the show. It will also be on Vimeo, Spotify and Anchor. We are looking to get it on Google and Apple. I found out I’m not a big podcast guy but we created one. There are a couple of big problems that people aren’t aware of or subconsciously they are but they are not thinking about it when they are making their purchase. Employees can’t pick their own insurance carrier or plan. It is whatever the employer makes available. The biggest problem is patients. When they need care the most, they do not know who to go to for the best quality. From a financial standpoint, what is it going to cost me? Is there an option? Is the cost different at different locations? I can tell you undoubtedly, and I know you know this. I was talking to someone, and it was a prospect that we were talking to. As I was talking, she said, “That happened to me.” I mentioned the fact that you need an MRI. Your doctor probably works for the healthcare system. He doesn’t know what the cost is but he has to be like, “Go to the front desk, and they will give you some names.” They have pieces of paper. It was like, “Here are ten places. All the nearest locations to my office within our healthcare system are where you can get that MRI.” I can guarantee you it is five times the cost of the independent radiologist waiting at the corner to help you. They make it easy. You can walk down the hall and get the test. They have availability because they always do. She said, “It costs me $3,000.” I used that as an example. She said, “That is about what it ended up costing me.” The shame is, without insurance at all, you probably could have paid $500 cash that day. We know that. That is a completely different conversation. Direct contracting is a huge thing. Some of these things are only available for larger companies depending on your state. That means different things. Direct primary care is available to anybody. You can buy it as an individual. It is not something that you can only get if your employer sponsors it. It is important too. We can’t sell individual plans in New York but I know for a fact that a majority of the plans that are bought from the state marketplaces are silver and bronze plans with higher out-of-pocket costs and big deductibles.
BWF S1 ep 14 | Functionally Uninsured
Functionally Uninsured: Direct primary care is available to anybody. You can buy it as an individual. It is not something you can only get if your employer sponsors you.
A lot aren’t subsidized because of the family income level of the people. They don’t know. They got this $14,000 family deductible. It is only there for an emergency. If they knew they could sign up for a direct primary care doctor, potentially for the entire family, for $200, I don’t know if that is a fair number for three members of a family to roll. Geography makes a difference. You can get it a little bit less. Even if there’s one member of your family that needs healthcare and you say, “I can’t afford all of that but for $75, I can make sure that my child, wife or myself have access to direct primary care doctor where there is no other out-of-pocket cost whatsoever.” We are talking about this equity and even touch on functionally uninsured. That is what that means. When you see that you cannot afford the deductible to even get started with the care you think you need, you are uninsured but you have a health plan for your employer. You are functionally uninsured. When we use that term, we start to talk to employers about that. We say, “There are a lot of ways to level the playing field.” You will be shocked at how affordable this is for you with the employer. I’m telling you, 100% of the time, the cost goes down. I’m talking about adding indirect primary care at $75 per person. It reduces their deductible to $0. We have a plan for every single employer where the deductible is $0, and the other one is $1,500. Those are the two plans. We get employers that push back on that. “If I raised the deductible, couldn’t my cost go down on my premium?” “Sure, but we don’t think that’s a good idea, and here is why.” The idea is don’t create any barriers and hurdles to primary care because 85% of your humans are going to go through in any year. It is only that the other 15%, maybe 20% of the time, are going to need specialty care or specialty medications. Don’t create barriers to primary care of any kind, including chiropractic, physical therapy, and mental health. We got to lower the barriers for that and that level of playing field.
85% of humans will go through direct primary care in any year, and it is important that you don’t create barriers of any kind here.
We ensure as you alluded to before, they go to high-quality specialists. Luckily the cost will almost always be lower when you do that. We will screen that out and make sure that is the case. When you have a $0 deductible plan with free primary care, now people go, regardless if they make $14 an hour or $80 an hour. We see primary care utilization go way up, and specialty care goes way down. You mentioned that earlier. That is the trend you see. That reduces the overall cost for the employer, which is ultimately what they are looking for. Our best clients are the ones that say, “I need my cost to go down, and I love my people.” It can’t be only the first part of that. They are not bought in yet. They are not ready. That is okay. It is a fantastic benefit when you get that far. When you are talking to the decision maker and to a business, they can’t ignore the fact that this costs us a lot of money. The cost might be at the forefront of their mind. That might be the deciding factor. I know you, and you know me. That is not the goal. The goal is to get people the best care possible. It happens that the way we are doing it and with the partners that we are bringing in, getting back to that English muffin, there are many hidden profits. We are taking them out.
BWF S1 ep 14 | Functionally Uninsured
Functionally Uninsured: Every individual must get the best care possible. Hidden profits must be taken away. Even if they are not taken a hundred percent, everything must be transparent.
We can’t always take 100% out but we are going to make them transparent. We are going to partner, and we are never going to stop looking for better partnerships. We are going to keep our partners accountable because the goal is to keep people healthy. When you keep people healthy, the cost goes down. When you extract all of those, spread pricing on medications, rebates, make sure that those are coming back through to the employer that you are addressing the outlier high-cost claimants and you are giving them nurse navigators and concierge health where people are going to proactively reach out to them, says, “We are here to support you.” You don’t get that from your insurance companies. Guide people through the process and make it easy for them. We need to let the employees know that this is a little different. It is not different in a bad way. There is a good possibility that someone may reach out to one of your members who has been identified as a potentially high risk for something or maybe they are not adhering to their medication. I would argue a lot of times. There is no more work for our employer partners. There is a lot more education involved. When they start seeing it, they don’t want to go back to doing business. For the people that are out there, what we are talking about, you might say, “We are a small company.” All of this might not relate to you. If you are a large enough employer, which in New York, and probably most states, 100 plus employers are almost always going to be at least partially experience-rated. If you are self-insured, your claim spend is crucial but the heart of everything is the expected claim costs of a company, and insurance carriers will add a 20% or 25% corridor above the expected claims. You produce the claims because you are bringing in and supplementing your benefits strategy with other solutions that extract all of that waste and unnecessary care. One of the real fundamental things of direct primary care is that 80% of all exams, tests and surgeries are unnecessary at the end of the day. A good doctor helps their patients avoid that unnecessary care. The members will ask, “Where am I going to go for MRI? Will you tell me where to go for my MRIs? Will you tell me where I have to go get my lab work done? Will you tell me where I need to get the X-rays?” Yes. You will have a lot less of that, trust me. Those are not going to be as necessary as you thought they might be. “I sprained my ankle. I should probably go get MRI.” Probably not. That may felt like the normal care pathway previously in your fee-for-service environment. It is not going to feel that way. Your doctors are going to use as many modalities as they have at their disposal, and they are going to refer out to physical therapy, chiropractic, occupational therapy or any other therapy that you have at, most of the time, zero cost or affordable cost because we got to get rid of the hurdles for primary care. It is not expensive for an employer to do that. They were like, “Do you mean I can pay 100% for primary care, an OT, PT and all these things? My cost isn’t going to skyrocket.” No. Those are not expensive. What is expensive is getting cancer treatment when you don’t have cancer, getting a knee replacement when you don’t need it or having back surgery before it is time to have the actual back surgery. That crushes your plan. We want to make sure that those things don’t happen because, frankly, no one wants to go through any of those. Let’s screen it out. When you do need that back surgery, make sure you go to the best person in town or region. You don’t have to worry about it. If you go where we ask you to go, you will pay almost nothing because it is better for everybody. That ask isn’t about cost whatsoever. It happens that the best doctors typically cost less. They do it more. They are experts at it. I know you know Nurse Deb, and I haven’t had the pleasure of working with AIMM yet, but I loved one of the presentations. It was at the YOU Powered Benefits Symposium. It was a symposium that E Powered Benefits, Aaron and his team over there held in Phoenix a few months ago. Nurse Deb, who is famous in our world, was up there. I almost had to walk out. I’m an emotional guy. She played her video, and there was one segment in particular. It was a couple, and they were probably somewhere in Midwest. A young couple, probably in their early 30s. They were talking about a surprise medical bill that they got because they had to take one of their children to the emergency room. I saw the helplessness in the father’s eyes. This was a company that needed a hole in the wall. They were steered through the healthcare system with complete disregard for their plans. You went back several years ago, and I talk about this all the time, this process that managed care went out. Here in New York, and a lot of people don’t know this, early days of managed care, almost all of the plans were filed as under HMO contracts with the state, which is different from an indemnity contract that a PPO or EPO plan. It is a contract. HMO plans have stricter guidelines on them. There was a point where in New York, the copay for a specialist was not permitted to be more than $50. That is where the original New York state law was enacted. We went from $5, $10, and $15 to $20. We went to the split copay, $20 copay was across the board, primary care doctor and specialist. All of a sudden, they were like, “We need to do something.” They did a split copay and tricked everyone, 20/40. We had to explain that we were nauseous. The $40 is for a specialist. The $20 for primary care doctor, once a primary care doctor, you know the whole story. They got to $50, and they had a problem. It was happening. I wasn’t conscious at the time of why this was happening because they weren’t inviting me into the boardrooms. They had a problem. They had no way of increasing premiums without it hurting people and losing business. They had to refile all their plans under indemnity contracts. They got to go ahead to $50, $75, to $100. Lo and behold, deductibles came back in. All of a sudden, what is a deductible? Don’t you remember several years ago you had it? Look where we are. We are at $7,000 deductibles. I know you guys talk about this a lot. It is not broken. It is working exactly the way it is designed to work and the healthcare system and the health insurance ecosystem. This is a turning point. They are watching closely to see what the American healthcare consumer’s going to do. In my book, I talk about the reawakening of the American healthcare consumer. We are consumers. We drive markets. Businesses have to change sometimes on a dime because our purchasing goes elsewhere. Blockbuster, people are still going to come in. They love coming in and the three-day rental.” They didn’t pivot quickly enough. Healthcare and health insurance are looking to see what is happening to our bottom line. Transparency Laws are going to mean that certain profit centers are going to dry up but they are creating new ones. All of these mergers and acquisitions own every component. They own the banks that do the HSAs, PBMs, case management companies, insurance companies and doctors. The healthcare system is trying to get into insurance. The insurance is trying to get into healthcare. Consumers can drive all of this activity. Employers can have such an impact on this because they influence all of their employees and their family members. Consumers will change this. We must be the nudge to say, “You can do this better.” If we think that the big players, whether they are healthcare or health insurance related, are not on this already and not already talking about buying direct primary care offices and building new direct primary care offices to be funneled into their hospital system or be value-added resources as part of a health insurance plan, we would be naive.
BWF S1 ep 14 | Functionally Uninsured
Functionally Uninsured: Big players in healthcare and insurance are already talking about buying direct primary care offices and building new ones to be funneled into their hospital systems or insurance plans.
They are on their radar. They could do it if they wanted to. They don’t want to have to but there will be a continued battle over independent providers and those that work within a hospital system. Especially well-resourced hospital systems can do it if they want to. There are some in your neighborhood and in my neighborhood in Cleveland, Ohio like that. They will only happen when consumers demand them. It is about thinking, and in every other aspect of our life, we demand information because we expect it. We don’t even expect it in healthcare or health insurance. We go along. We have been groomed slowly but surely. Brokers were groomed. I do not blame anybody for this. However, it is hard to avoid the fact that the deliberate withholding of actionable data prices, that blame has to be pointed at insurance companies and the healthcare system. You call up a doctor and ask them, “What is this going to cost me?” They still can’t answer it, even though there are laws that say they must. People don’t know about the compensation disclosures, transparency in pricing, and all of these things that we talk about every day. We got all of our compensation disclosures out all the way through the May of 2022 accounts. We sent a nice email. We said, “We have been waiting for this day.” The consumer has to ask some hard questions. Can we do better? Ask your insurance brokers and partners, “Where is our data?” I learned something I didn’t know about because of the release of the gag orders. Your insurance carrier can’t withhold. Even on a fully insured plan, you are entitled to your data. That shouldn’t even be a stretch. People out there be like, “What data are you talking about?” When we did our first pharmacy analysis, prescription price cost analysis, I nearly fell off my chair. When I saw $2 medications that I won’t name the carrier because I don’t like to do that, their insurance carrier was charging $80. The member was only paying a $5 copay. They had enough charging $5. They are only laying out $2. I’m not there at the point of sale. Hopefully, they are paying $2 out of their pocket but the health plan was being charged $80 for a $2 medication because of the spread on that. What we identified is about a 53% unnecessary cost in their pharmacy. This is a company that, to date, because we did move them, thank goodness. They trusted us, and we went independent. TPA and PBM, their pharmacy costs are down 50%. That is going right back into their employee’s pockets. They called us up three months into it. They said, “We want to enhance our benefits package.” They saw their monthly cost going down. They were like, “We are having such a hard time hiring people. We want to enhance our benefits package. We want to be the place to work.” We talk to friends of mine. We will talk a little bit about what I do. They were, “I have good benefits.” I was like, “That is good. I’m glad you have $5 copays. Guess who is eating it? Your employer is eating it.” I need to be talking to them because how much better your benefits are about to be if their eyes are open and they can come to Aaron and go, “You are telling me I’m paying 30% more than what I should? You can trim my cost by 30%.” Yes, within a year, maybe two. They go, “I could have $0 deductibles. Could I make those medications free?” Yes, your employees will love it. You won’t ever lose them because they will have to think hard if they are going to leave you and go somewhere else who hasn’t done this yet. Especially now with this shortage, and it is incredibly hard to find support. These conversations are coming up like that.
If medications can be made free for employees, they will think really hard if they will leave your team. Finding that kind of support is incredibly hard.
I selfishly tell friends of mine and acquaintances, “You might have good insurance but if it is that good, you probably should introduce me to your HR, CFO, and president. We can have that conversation. I can make sure that they are not taking it on the chin as the employer.” A friend of mine is in a nonprofit. She got excellent benefits. I looked at their stuff. They are getting killed, and it is a nonprofit. Nonprofit is an unbelievable opportunity because they don’t pay significant wages. They have to offer rich benefits to attract people. I had a cemetery client similar to that. At one point, he says, “Could you imagine coming here to work every day? We have 100% coverage. We pay 100% on the premium.” Their cost was twice what it probably should have been. It was before we even had access to data. I was like, “I get it.” You have to do what you have to do to keep employees. Getting back to the whole functionally uninsured aspect of it. They are also functionally uninformed. You are going to tell them where to go but there is still an option. It is not like you are mandating, “Go here or no benefit.” You are saying, “You can go here, and it is going to cost you your out-of-pocket cost under your traditional health insurance plan. We are passionate about sending you to the highest quality provider. If you go to this tier-one provider, it costs you nothing. It is not with the profit motive. It is not we are going to send you here because it costs less. We are going to send you here because it is the best thing for you. Your employer truly cares about you and knows you are starving for that guidance.” Think about DPC at $75 per member. That is not cheaper than primary care. It is better. It will make it cheaper ultimately for you and the employer but it is not cheaper. That is not an option to go if you are trying to look to cut corners. One of the things that I’m passionate about because we have two different types of prospects here in New York. It is clear and defined. Under $100 is still fully insured. The only way outside of the normal insurance carrier model is PEO. A hundred plus, you have a lot of different options there. For the small groups, what we recognize is that way too many of them went the way of the HRA. We have a better way to HRA because you are buying a plan and saving this bundle of money. Everybody knows what the strategy is. We started with plan A and went to plan B. We have this bucket of savings. We are going to cover the out-of-pocket costs. Our bet is that we are probably going to pay less than 50% of that back to the employees. I get it but it could be so much less because what you haven’t solved for is the fact that you are still a victim of that steerage of the healthcare system to suck every penny out of you and your employees. Even though you are funding it in your employee’s hole, your employee got no guidance. There is no guarantee that they are seeing the best doctors. We are excited about some of the things that we are going to be doing to help those people get the guidance that they need so that the employer can retain more of the HRA and use those additional savings to enhance benefits. Maybe to increase the pay that they have been withholding.
BWF S1 ep 14 | Functionally Uninsured
Functionally Uninsured: Even though your employees have ample funding, they can still fail to see the best doctors if they have no proper guidance.
Everybody knows that Kaiser chart, where out-of-pocket costs have increased by 162% in the last several years. Premiums have increased by almost 100%. Wages have not increased. They are starting to now at as out of a matter of necessity potentially. Inflation is now at 8.3%. When you think about that, even those higher wages now, all of a sudden, are gobbled up by the cost of living. Let’s hope it is temporary. I don’t like to get into politics but we can solve much of that. We can help employers and their employees. What I don’t like, and I’m sure you agree with me, is that when I find after the fact that an employee made a decision based on what was coming out of their pay and didn’t even look at the health plan, especially because most of our employers offer multiple plan choices. We always see a majority going to the low plan. Seventy percent of the people are adequate because they might not even go to the doctor once a year. When someone has a health condition and in a year goes to urgent care several times. They might go to the emergency room and takes numerous medications. They feel like, “I made the wrong choice, and I didn’t get any guidance.” That is one of the things that we are trying to help employers. We want to do a better job. We know that we need to do a better job educating the employer and their members so they can make better healthcare decisions. You were talking about getting emotional about that story you told. Those are real human beings. This is not some special story. She could have plucked hundreds of her clients, hundreds of our clients, your clients, and interviewed them about their medical bills and hassles with the health system. We will be emotional. It is not hard to find these stories. We have got to do better for human beings who don’t know how to navigate the system. They don’t know what we know about the systems, health insurance, asking for a discount and what the bill is going to be upfront. They don’t understand. You were touching on like health literacy part of this because you can’t drop a plan like this with a $0 deductible plan, direct primary care, intensive medical management, and specialty surgical centers and expect people to navigate it easily.
There must be a better healthcare system for every human who doesn’t know how to navigate it well. Many don’t understand healthcare insurance, discounts, and even upfront bills.
We tried hard to do a lot of ongoing education with employees. It depends on where they are and how they like to get their communication. We tried a lot of different ways. One of the ways we are starting to understand what we need to do is with a mobile app. People need to be able to use that like they use many other apps. Luckily, smartphones, and it doesn’t matter what smartphones are ubiquitous. People have them now, and they know how to use them. They are quite easy. We got to keep evolving to that level like other businesses are evolving. Otherwise, people aren’t going to be able to navigate it. They will fall back to the, “What is easier? Let’s go with the name X carrier nationally that my broker seems to bring up all the time.” They will fall back into old habits. We got to take the responsibility to push it forward and say, “Ours is not only easier. It is better and cheaper.” What excuse do you have as the CFO, CEO or president to say no? Hopefully not. The only barrier, and it gets back to maybe the point I made earlier, is time. They have to give you the time if they truly care. I tell people, “The conversation is complex. The solutions are simple.” I’m always in my neck of the woods. I’m almost always the first person to have the conversation and say, “I want to see your renewal but I want to talk about your renewal yet. My focus isn’t on your premium. My focus is on your people, and it is the healthcare because you are buying healthcare. Let’s understand what is happening here, and I can help you spend a lot less on your health insurance.” They need the buy-in. You know right away if they are committed as much as they are. If they are too busy, want to go back to doing it their way, and still only want to commit a 90-day window to it, they are not going to get the help that they need. Everybody needs it. There is not one person who is fully insured in this country that isn’t paying too much for healthcare. I challenge anybody to show me that if there is. This has been great. Thank you so much. It is an hour, and we didn’t even show one slide. It was amazing. We don’t need that. They rather look at your face than look at a slide anyway. I have some contact information here. I’m here in Woodbury, New York. I will talk to anybody. One of the things before I let you go. I always get to ask this question. This isn’t a sales thing. I’m sure that you will share this thing. I always get asked by a lot of people, “Will you work with a ten-person group or are you only working with a 200 or a 500-person group?” I say, “The 500 and 2-person groups have one thing in common. It is people. Those people are as important as the rest of the people. If they want help, I will spend as much time as they need to educate them and get them caught up.” That s what I’m passionate about. We have a two-person group that is level funded. It can’t happen in New York. 2, 5, 6 or 12-person. I quoted a fifteen. We got a 200-person group in Anchorage. We got a 2,000-person group in Pennsylvania and a 22-life group in Tampa. It is all over the board. We are trying hard not to have to say no to anybody for that exact point. You and I selfishly want to say yes. We want to be able to do all these things. Luckily, it is getting better and easier. We will help whoever we can. Dale said, “Aaron prefers the five-person. He is a saint.” He is an avid follower. He has been on since I met him. I met him at the YOU Powered Benefits. It is a community. There was a community of people there. If you are in Chicago, Illinois, and I can’t help you, I will find someone that can. If you are in California and you want to talk because it sounds different, I will help you find someone. This isn’t about the Lou Bernardi show. This is about spreading the word, raising awareness, and helping people understand that there are better solutions out there. We have to move the needle, push the market and tell the status quo that we can’t take it anymore. We have hit the ceiling. There is not much further that we can go. You can’t water your plan down any more than you have if you have already reached that $7,000 deductible. No one out there wants to do that. There is a better way. If your trusted advisors can’t help you with that, I will do a plug for Health Rosetta. Go to the There is a link there that has all the advisors in the network. If you can’t find that, call me and email me. There is my contact information there. I will be more than happy to connect to someone that can help you. It will be as passionate as you, and I are about doing that. Thank you so much. I will see you soon, hopefully. I will talk to you soon. See you, Lou. Take care. Bye.

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