September 3, 2019

The Future of Transparency: Can Data Fix Health Care? [Part 4]

It’s time for Part Four of our series of blog posts recapping a recent BenefitsPro and Artemis Health webinar. The webcast The Future of Transparency: Can Data Fix Health Care?” featured panelists included Jim Blachek, co-founder and principal at the Benefits Group; Lester Morales, CEO of Next Impact; and David Contorno, founder and CEO of E Powered Benefits. Eric Silverman, founder of Voluntary Disruption, moderated. Slides and audio are available on-demand. 

This week, we’ll focus on how benefits leaders are preparing for the future of healthcare with data. How do you make insights from data actionable? Let’s dive in.

Eric Silverman: So let's move onto this other question here I want to make sure we have time for, and we also want to get to a bunch of the questions that have been filtering in. We appreciate that, keep your questions coming. How do we make all of this actionable? How should benefit leaders prepare today for the future itself? Jim, did you want to kick us off here?

Jim Blachek: Until employers agree, that the path that we're on is unsustainable, changes are difficult. The employer has to understand that we can't continue to do things in the manner that we've done them in the past and make the changes that need to occur.

They [employers] have to be willing to say, "Yes, I'm willing to take on some new idea or new tool or new strategy and begin to do it." And it doesn't have to be a billion things at once. It can be one simple tool and strategy to get them down the path of taking control and being able to reduce the size and frequency of claims. So it's really important. Today is always the best day to start. Don't think you have to be perfect; begin today.

Eric Silverman: Awesome, yeah. I mean the path to perfection or the journey to perfection is often riddled with mediocrity. David, what do you think about this? How do we make all of this actionable? How should benefit leaders prepare today for the future?

David Contorno: Well, I think the most important thing is putting your client in an environment where you can see and effect change. If you can't see it, you can't change it. And if you can see it, but you're prohibited from changing it, then you can't do anything about it.

This notion, and I've heard it before from brokers, consultants, and employers, is cancer is cancer, what are you going to do? Well, let me tell you guys, cancer is not cancer, and cancer has one of the highest misdiagnosis rates.

We took over a plan that had been with a “local blue” for 25 years. It was a municipality and in that plan there was a spouse of an employee who was taking $100,000 a month cancer drug. We get our nurse oncologist involved as part of our medical management team, all of who use clinical evidence based guidelines exclusively. 

And we called the prescribing oncologist and we said, "Hey, the drug manufacturer and the FDA say that in order for this diagnosis to be correct, and this treatment to be correct, certain blood panel and pathology need to exist 18 months ago when you started her on this medication. Can you please show us the blood work and the pathology that they did indicating that this was the appropriate diagnosis and treatment?”

The oncologist said, "I didn't do that blood work. I've been an oncologist for 25 years, I've seen this cancer dozens, hundreds of times maybe. I know what it is. I know how to diagnose it and I know how to treat it." And we said, "We're no longer paying that $100,000 a month bill until you get that blood work and pathology done." And they did. And guess what? She didn't have the type of cancer that the oncologist thought.

She had a different type of cancer, and the type of cancer that she did have first of all was only $6,000 a month in treatment, and was far less invasive, and far less toxic on the patient. And in the six months that she's been on this new treatment, her tumor has reduced 75%, whereas in the 18 months prior to that, it didn't shrink at all.

I just brought a claim from $1.2 million down to $72,000 that made the employees life, the patient's life, better, and got them on a treatment that's going to actually improve their disease state. To say that a claim is a claim is not true. And you can't do any of this number one, if you don't have the data, and number two if you don't have an environment that allows you to do these things.

If you're deferring medical management to an entity that says we set the rules because we think we know better for your client, and you look really deep at how that medical manager or that carrier makes money, I think when you start to look at how everyone in the healthcare space earns money, you will start to see that the system is ripe with perverse incentives.

Everyone across the table from your client, including most brokers and consultants, make more money as costs go up, as claims go out, as the frequency and severity of claims increase. Brokers make more money, stop loss carriers make more money, insurance carriers make more money, insurance carriers make more money, PPOs, PBMs everyone. Doctors, hospitals, drug companies.

Fundamentally we need to turn those around and we need data to do that. We need data to show us where those perverse incentives exist, and then we need data to show us how to fix those. In our environment, we're able to fix them on the fly. We don't have to solve everything prior to open enrollment every year and then put it on a set it and forget it for 12 months.

We have the ability to constantly make adjustments every day, every week either within the claims adjudication system, the medical management system or even the plan document system.

Eric Silverman: David, what about putting your fees at risk?

David Contorno: Well, we do it with almost every client. The way that we structure it, is in our agreement we are prohibited from receiving any compensation on a medical plan from anyone other than the client, the employer. It's in our contract. We prohibit it. We set up a base fee that we invoice the client for directly. It's not coming to the GPA, it's not coming through the stop loss vendor, and we set a bonus structure.

The first time I did this, I said to my client, “I'm going to relinquish a lot of bonuses from the carriers, because they're paying me these bonuses to do what they want me to do, but I would rather get paid the bonus by doing what it is that you want me to do.”

We set up a bonus structure so we get a base fee that really covers our cost, and then the profit comes from achieving the goals that the client wants us to achieve. Normally it's tied to lowering costs, although we have some that do it around quality improvements. For the most part it's tied to lowering costs, so we put our fees at risk, We generally tie our performance to a minimum of a 10% total cost reduction from the prior year, so we don't get anything unless we save 10% or more minimally.

I think that any broker/consultant that's not willing to tie their fees to delivering the results the client wants them to deliver, the only reason I can think of that they won't do it, is because they don't feel confident that they can accomplish that. And that's what we need is to develop a bunch of people who are confident that they can do that, because that's what we need to do.

Eric Silverman: Lester, I want you to weigh in on this. Let me repeat the question. How do we make all of this actionable? How should benefit leaders prepare today for the future? I have an image here I wanted you to walk us through. Answer the question of course if you can, please, but I want to see if you can walk us through this.

Lester Morales: I think David said something, “You can't change something you haven't seen.” I would say to benefit leaders (inclusive employers and their advisors alike that are listening to this call), you got to be able to show them where they are and the opportunities that there are for health improvement, better quality, and saving money. This is an example of an analysis.

We're not talking about changing a PBM, we're not talking about a plan design. We're exposing the fact that you've got two employees that are taking something that costs a ridiculous amount of money and with clinical evidence, there's an opportunity to save an exorbitant amount of money off of a very low number of people.

I look at this and say, “How many of you have put something like this in front of your client?” It goes back to, you gotta ask the carriers to give you the data. And it's not ask, you have to contractually mandate getting the data.

You got to have the tools to be able to put it into the system, if you will, and it spit out things that can identify where the issues are. This is one that is impacting just specialty drugs, and the opportunity to just impact two employees and save $120,000.

I'm a Tampa boy and this is something that I tell and show clients, and this is from our friends at Six Degrees. But this is data that is accessible to every advisor if you want it. The reality of showing employers in a particular market, the difference between what they're billing and what they get reimbursed by Medicare in Tampa, Florida, being eight times your 50-60% discount is rubbish.

The ability starts with change, but the ability to even start with change starts with education. So I would say what can everybody do on this phone to get everybody prepared is you have to expose.

Back to the message of all of this: the current system's riddled with things that are broken. And I am an advisor who made a lot of money. I had my own three and a half million dollar book at Willis. I know what it is to chase the network discount. I know what it is to be normal, run-of-the-mill. The reality of it is, once you know this stuff, it's incumbent upon us if we want to carry our industry into the future. It's incumbent upon us to make the change. The change starts with education, and so that's where I would go with that.

Stay tuned for Part 5 of this discussion, where we dive into audience questions and wrap up final thoughts on the question, “Can data fix healthcare?” 

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