What does “smart” health plan design look like in an industry packed with legacy thinking and rising costs? In Part 1 of a special two-part ShiftShapers interview, host David A. Saltzman welcomes back David Contorno, president and founder of ePower Benefits—and one of the industry’s most well-known disruptors.
David pulls back the curtain on his journey from traditional insurance to innovative plan design, explaining why “business as usual” can’t fix the healthcare system. He discusses creative strategies like reference-based pricing, direct provider contracting, and the evolution of self-funded health plans. Through stories, data, and first-hand insights, David lays out the “shifting structures” that are changing how employers, brokers, and providers think about benefits.
🔜 Don’t miss Part 2 next week! We’ll dive even deeper as David shares the personal struggles that reshaped his perspective on plan design, including lessons from his own healthcare journey.
🤖 Sponsored by BenePower
BenePower is an AI-powered platform helping advisors build high-impact, self-insured health plans quickly and seamlessly. By integrating best-in-class point solutions and eliminating inefficiencies, BenePower reduces costs, improves member outcomes, and positions advisors as industry leaders.
🔗 Learn more at BenePower.com
🔑 Key Takeaways from This Episode
- The Origin Story of a Disruptor: David shares how starting in insurance as a teen led to a lifetime of challenging the status quo.
- Why Health Insurance Is Failing: Hear David’s epiphany about how current health plans fall short of protecting people from catastrophic loss.
- Reference-Based Pricing & Beyond: Understand the pros, cons, and evolution of “blunt instrument” cost-saving strategies.
- Direct Provider Contracting: Learn how building new provider relationships can drive savings and better outcomes.
- Fiduciary Responsibility for Employers: Discover why doing what’s always been done is now a liability, not a strategy.
⏱️ In This Episode
00:00 Introduction and Guest Welcome
00:59 David Conno's Background and Early Career
03:03 The Epiphany: Realizing the Flaws in Health Insurance
09:35 The Power and Challenges of Reference-Based Pricing
18:23 The Cash Pay Experience and Personal Health Journey
28:03 Innovative Solutions: Direct Primary Care
31:24 Conclusion and Final Thoughts
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Plan design has evolved beyond things like
reference-based pricing andother first-generation
alternatives.
What's new, what's coming downthe pike, and how has a personal
experience informed one of ourindustry's foremost disruptors?
We'll find out on this episodeof Shift Shapers.
Speaker 2 (00:18):
Change either energizes or paralyzes.
The choice is yours.
Energizes or paralyzes, thechoice is yours.
This is the Shift Shaperspodcast, bringing the employee
benefits industry interviewswith individuals and companies
who are shaping the industryshifts.
And now here's your host, DavidSaltzman.
Speaker 1 (00:40):
And to help us answer that question, we've invited
David Contarno, president andfounder of ePower Benefits.
Welcome, david.
Hi, david, thanks for having me.
Oh, it's our pleasure.
Thanks for being on the podcast.
You are an anomaly.
You are a third-time guest, soyou must be doing something
right.
Speaker 3 (00:56):
I'm honored.
Thanks for having me.
Speaker 1 (00:58):
Oh, it's our pleasure .
Speaker 3 (01:08):
So let's start out with a little bit about your
background because, as hard asit is to believe at our vintage
in the industry, there are stillsome people who don't know how
we got to be doing what we'redoing.
For me, I started in theinsurance industry when I was 12
years old, believe it or notNow.
That was telemarketing lifeinsurance for an agent of
Prudential, but I was quitesuccessful at it.
But it was actually at 17 thatI found myself in the benefits
space.
I had graduated high school alittle early, went to college
for a year in photographynothing to do with insurance and
(01:29):
then went to work for my fatherin an unrelated industry.
The family dynamics didn't workout so well pretty quickly and
my best friend and roommate atthe time he worked for his dad
and him and his dad had a smalllittle group benefit shop on
Long Island.
It was just the two of them andan assistant and I basically
quit the job with my dad on aFriday, showed up with my best
friend Monday morningunbeknownst to his dad, and his
(01:52):
dad sort of took me under hiswing.
His dad was more the salesmantype, whereas his son was kind
of more the in-office accountmanager type, and so there was
this kind of instant bondbetween he and I and I started
running to the very ends of LongIsland for two life plumber
groups with fully insured healthplans.
And that's how I started in thehealth insurance and employee
(02:13):
benefits game.
Very simple, humble beginningsand I fought my way tooth and
nail to grow in the sort oftraditional world and was quite
successful.
For many years I grew a coupleof agencies, bought some, sold
some, but you know, eventually Ihad an epiphany.
Speaker 1 (02:37):
And we'll talk more about that.
I mean, you know it'sinteresting in today's parlance.
For most people they know thephrase creative disruption from
Clayton Christensen and hisbooks.
I would say that you are moreof an OG type.
You're back with AlfredSchumpeter who, back at the turn
of the century, created thephrase creative destruction,
because I think one of thethings that you realized early
on was that what was therewasn't working and it couldn't
be fixed.
(02:57):
It needed to be replaced orbroken.
Tell us a little bit about howthat epiphany came about.
Speaker 3 (03:03):
Well, actually it occurred when I was at a open
enrollment meeting for a renewalfor a client and it was a year
in which, unsurprisingly, therates had gone up more than the
employer could stomach.
And this actually happened tobe a physician's practice.
They were ophthalmologicalsurgeons and, of course, most of
the employees were staffmembers, making far less than
(03:24):
the four or five surgeons thatown the practice.
They were ophthalmologicalsurgeons and, of course, most of
the employees were staffmembers, making far less than
the four or five surgeons thatown the practice.
And in order to offset some ofthat premium increase, the
practice administrator haddecided to go with a higher
deductible and higherout-of-pocket.
And this was back whendeductibles were like a thousand
bucks, which seems low bytoday's standards, but it was a
(03:46):
thousand dollar deductible and,if I remember right, it was a
three thousand dollar total outof pocket.
And I remember looking aroundat these people and saying,
other than the doctors, not asingle one of these people
probably has three thousanddollars laying around, let alone
three thousand dollars extrayear after year if they're
dealing with chronic conditions.
And this was before HSAs evenexisted.
(04:08):
So the deductibles wereapplicable in a much more
limited fashion than they are inmany people's plans today.
But even so, when I mentionedwhat the out-of-pocket was going
up to, I saw this look of fearin some of their eyes.
Saw this look of fear in someof their eyes and I think part
of it was because they were in amedical practice and they
specifically were in a surgeon'soffice, where a lot of people
(04:29):
were more being exposed to thedeductible than primary care
physicians offices, for example.
And so they recognize thatthere's a real possibility, and
maybe even a known possibility,if they were dealing with some
chronic conditions that theywere going to be exposed to this
out of pocket, were dealingwith some chronic conditions,
that they were going to beexposed to this out-of-pocket.
And at a similar time, Iremembered something that many
(04:52):
years prior to that because thiswas 15, 16, 17 years into my
now 32-year career when Istudied for my insurance exam up
in New York State, part of thatexam was the history of
insurance.
Why did humans invent insurance?
When did it first come about?
And my recollection is that itwas communities coming together
because, you know, someone inthe community had a house fire
(05:13):
and the house burned down andthey didn't have the money to
rebuild, and so they pooledtheir money together as a
community, they all put in alittle bit of money and then
they shared those resources inthe event that somebody had a
catastrophic event.
And I was reminded thatinsurance was developed by
humans and, to this day, in allinstances, with one notable
(05:33):
exception is meant to do onething and only one thing, and
that is to protect us fromcatastrophic financial loss.
That's what life insurance does, that's what homeowners
insurance does, that's what lifeinsurance does, that's what
homeowner's insurance does,that's what auto insurance does,
that's what workers' compinsurance does and liability
insurance.
But I started to see statisticslike health insurance not doing
(05:54):
that, bankruptcy being thenumber one, or medical bills
being the number one cause ofbankruptcy, with a lot of those
people having had healthinsurance.
And I said to myself there's acouple of things that are
different about health insuranceas we know it than every other
type of insurance.
Number one, it's not protectingus from catastrophic financial
loss.
Number two, we are expecting itto cover things that we expect
(06:17):
other insurance to cover, whichI would describe as severe
events that are unlikely tooccur the heart attacks in
healthcare, the hurricanes andthe tornadoes.
But we've also come to expectit, and I think this was born
out of the HMO model in the 70sand 80s that became popular to
cover the very frequent notsevere events.
(06:40):
And if you think about it fromjust purely an insurance
financial perspective, take allyour health care, health
insurance knowledge out of theequation.
Insurance doesn't function longterm when it's trying to cover
the infrequent severe and thevery frequent not severe.
It's just not.
Insurance is not a vehicle thatis designed or adequate for
(07:03):
doing that.
And so these realizations reallystarted to get me to ask a lot
of questions, and I reallydidn't get a lot of answers as a
matter of fact, because I had alarge agency at the time.
I had access to carrier execsand hospital execs and some of
the large broker firms, execs,and when I asked them why do we
(07:24):
continue to get worse clinicaloutcomes every year in the
healthcare system and pay morefor it?
The answer among them wasremarkably similar it's not our
fault, it's their fault, and whothey pointed to might have been
different, but it was in thatmoment that I said to myself
what is my contribution to thisand, more importantly, what
(07:45):
control do I possess overchanging that?
And it was that realizationthat was really the catalyst for
the change in how I approachedwhat it is that I do.
Speaker 1 (07:55):
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And now back to ourconversation.
It's interesting.
We went, you know, kind of tofor a while.
With that change, we went tosome what I call blunt
(09:43):
instruments like reference-basedpricing, and you know that had
a place because there wasn't awhole lot else to hang on to.
What's happened since then?
Bring us up to date and then wecan talk a little bit about
what you see coming in thefuture.
Speaker 3 (09:59):
Reference-based pricing is an extremely powerful
tool.
I again went to one year ofcollege for photography, so I
don't have an MBA, I didn't goto school for business.
(10:23):
But when that epiphany that Ijust mentioned occurred to me, I
realized that while I knew alot about insurance in other
words, I knew a lot about themoney going into the plan
whether it's realized that themoney we have to put into the
plan in our world, collectivelybetween the employer and the
employee, slash patient is adirect result of the vacuum left
by the money coming out of theplan.
(10:44):
And if I don't get tounderstand that and I don't get
to fundamentally change that,then I'm never going to change
the direction that we're goingwith the money going into the
plan, then I'm never going tochange the direction that we're
going with the money going intothe plan.
And reference-based pricing isa really powerful tool from a
financial perspective for notonly changing the amount of
money going out of the plan but,far more importantly, to create
(11:05):
a much more logical andsensible way of pricing,
something in which the price isnot determined until
post-rendering of services.
That in and of itself isrelatively unique to healthcare.
There's very few things we buyor consume, where not just the
consumer but the provider ofthat good or service doesn't
(11:25):
know the price of what it'sgoing to be until after services
are rendered.
So it creates an inherentlydysfunctional dynamic that is
very difficult to overcome, andreference-based pricing, at at
its core, is at least a moresensible and, I believe, fair
although a lot of providerswould disagree way to determine
what the price of care should be, considering the care has
(11:47):
already been rendered, but itcomes with a lot of problems.
The first issue is the initialbold and I give a lot of credit
to the very firstreference-based pricing vendors,
brokers and TPAs.
They took a very aggressivestance in terms of how they
priced it, and the part of thereason they did that was because
(12:09):
, hey, there was no precedent,so why not?
But by paying a lower amount toa provider, it allowed them to
retain more of the savings forthemselves, which was necessary
for them to then defend thispayment model.
That not only had providersnever heard of, but once they
(12:29):
realized what it was felt wasunfair.
Once they realized what it wasfelt was unfair, and so I give a
lot of credit to thosetrailblazers.
However, it's created a legacythat exists today, where there
are many providers that arestill very resistant to any
pricing known as reference-basedpricing, especially when
Medicare is the metric by whichwe use to find some sort of
(12:53):
multiple.
Medicare has a very negativeconnotation from a financial
perspective when you speak topeople in financial positions at
health care providers andhealth systems in particular.
There are ways to ease that,there are ways to overcome it.
Our philosophy withreference-based pricing has
always been pay the providersmore.
Pay the people that arerepricing it less, because you
(13:15):
don't need them as much.
When you're paying theproviders more, it's more
accepted.
But again, even in that model,there are still multiple issues
and, more importantly, thatmodel in no way is addressing
improving clinical outcomes.
So when I started to feel thesepains and frankly, we've lost
(13:38):
business over the friction thatcomes with pure reference-based
pricing the very next thing Isaid is what if I created
agreements with providers,essentially creating my own
quote network and I use my airquotes just because to me a
network is akin to a four-letterword.
But what if I could find someproviders that I could speak to
(14:03):
and bring some benefits to themin exchange for some benefits to
us and to my clients?
Now, their biggest fear atfirst was not so much how much
they were going to get paid, butif that amount were a lesser
amount than they were gettingpaid from the traditional PPO
networks, would those PPOnetworks find out and then want
(14:26):
lower pricing?
And at first I bought into thatphilosophy.
Right, if someone's paying alower price, why wouldn't
someone else want to also paythat lower price?
Now I've learned more that bothcarriers and providers benefit
from escalating and inflatingpricing, so that dynamic doesn't
actually exist.
But that was the thinking atthe time, and so at the
(14:48):
beginning of these conversationsI had to sign a lot of non
disclosures.
I had to make them exclusive toone particular employer.
A lot of times some providerswouldn't do it unless I had
massive scale behind me, andsome wouldn't do it unless I had
a very small group of patientsbehind me, and so much.
Like we see in many areas of thehealthcare system, there's a
lot of inconsistencies, but wewere able to do things for
(15:13):
providers that over the years,and even more so today, is of
great benefit to the providers,which is waving out of pockets
as deductibles and out ofpockets have gone up.
Hospitals write off on average75% of patient out of pocket.
But think about this dynamicfor a minute the more out of
pocket they write off, the morepressure they put for higher
(15:35):
reimbursements from theproviders.
The higher the reimbursementsgo, the higher the premiums in
the market go.
The higher the premiums go, thehigher the deductibles go, the
more they write off.
And we just have been on thiscircling the drain.
And so I said to myself likehow do we, how do we get past
this?
And we've been.
We've been really successful 18or 19,000 direct contracts with
(16:00):
providers around the country.
Now, admittedly, a lot of themare with ASCs, smaller hospitals
.
We've actually developed somewith some larger hospital
systems in some parts of thecountry, but to far less of a
success than with the smallerones.
Now that brings me to one otherphilosophy, and many of you know
(16:24):
my partner in many ways, emma,and Emma has helped me see a
more empathetic side to this.
Employers have developed thisnotion that when it comes to
health insurance, they mustallow their employees to go
(16:46):
wherever they want, wheneverthey want, for whatever they
want, and I find that veryinteresting, in particular in
light of someone who issimilarly injured.
But on the job Workers' comphave been embracing things like
reference-based pricing andnarrow networks and limited
providers for years, and forsome reason, employers think
that if they're hurt on the jobit's okay for them to make more
(17:09):
fiduciary decisions than whenthey're sick or injured not on
the job, and I don't understandthat there is no.
If any employer is listening tothis, not only do you not have
an obligation to give youremployees the ability to go
wherever they want to go, but, Iwould argue, in doing so,
you're actually breaching yourfiduciary responsibility,
(17:31):
because it gives them theopportunity to go to a high-cost
and or low-quality place, whichdoesn't just harm that patient,
it harms the company, it harmsall the other participants on
the plan.
So this notion that peopleshould be able to go wherever,
whenever is something that Istruggle with.
But I will tell you, if I takethat hardline approach and I've
tried it's very unlikely to getan employer to say yes and or
(17:55):
stick with it long term, and sowe had to come up with a
solution.
No-transcript, hypocritical.
(18:33):
If I had a Blue Cross and BlueShield ID card in my wallet, I
don't, and I haven't for years.
What I do have is a directprimary care membership for me
and my family.
We pay for it, for ouremployees as well.
And then I have a in my case, anon-faith-based sharing program
behind it which is not healthinsurance.
It doesn't work like healthinsurance, it doesn't have
(18:54):
regulations and mandatedcoverages like health insurance,
and so there's a lot oftheoretical financial risk, or
more theoretical financial risk,but, remember, people are going
bankrupt with health insurance.
So I question whether or notthat risk is greater or not.
But what this allowed me to dowas present myself as cash pay.
(19:14):
So last year, in 2024, inJanuary, give or take, I
developed a really bad shootingpain down the right side of my
leg, the outside of my right leg, and I pretty much knew right
away it was sciatic leg pain,but it was pretty bad.
And just from what I do, I knewthat if I went to a back
(19:36):
surgeon, they were going torecommend back surgery.
I know there's a lot ofunnecessary back surgeries and I
know the most likely outcome ofback surgery in the United
States is additional backsurgery.
I know there's a lot ofunnecessary back surgeries and I
know the most likely outcome ofback surgery in the United
States is additional backsurgeries, and so I did
everything I could to avoid that, and so I tried physical
therapy, I tried stretchingexercises, I went to a
chiropractor, I mean, I did allthose things but it wasn't
(20:00):
working, or at least it was onlyproviding mild and temporary
relief.
I had an MRI.
It showed that I had a bulgingdisc between L4 and L5.
And luckily, I know a bunch ofdoctors and one of the things
that a doctor, a very gooddoctor friend of mine, said to
(20:21):
me is David, you have symptomsin which the MRI matches the
symptoms you have.
That means, and after tryingeverything else, that means that
you might be a candidate forsurgery.
Now, as a side note, while I wastrying to manage all this pain,
(20:42):
I was taking over-the-counteribuprofen, and a lot of people
think prescription drugs aresomewhat innocuous, let alone
over-the-counter.
But I want to let you peopleknow that the ibuprofen,
combined with a stomach bug thatI got, caused me to become very
dehydrated, unbeknownst to me.
I just knew that I was feelingworse and worse, and worse and,
(21:05):
prior to actually consultingwith a surgeon, I decided to get
an epidural to try and just getsome relief from this pain.
And when I went to thisorthopedic urgent care center to
get the epidural, they took myblood pressure just as a matter
of course.
And it was 71 over 44.
And for anyone knows bloodpressure, the doctor was kind of
shocked that I was able to evenstand upright, which I was
(21:27):
barely able to do.
I wound up being rushed to thehospital and I was in acute
kidney failure.
I had 100% reduction in onekidney and 90% reduction in the
other kidney, all due todehydration.
All due to dehydration.
Again.
Another word of caution forpeople is when I was in the
(21:47):
hospital here I am in massivekidney failure and of course the
doctors, that's their numberone concern.
But they asked me what mynumber one concern was and I
said it's my sciatic leg pain.
Well, they wind up giving meopioids, oxycodone, in the
hospital.
You know they dosed it out tome at whatever the recommended
(22:08):
doses was, a few times a day.
They wound up giving me massivefluids over the course of
several days and I went homewith a script for oxycodone.
I took it less than prescribed.
It had some moderate relief,but I finally resigned myself to
exploring surgery.
You know, again, knowing thehealth system a little better
(22:30):
than most, I had a resource toreach out to a nationally
recognized orthopedic surgeonand I said this is what's going
on.
If you were in the Charlotte,north Carolina area, who would
you send your family to?
And she gave me a name, so Icall that up.
They're part of an independentorthopedic practice that happens
to be pretty well respected inthe area.
I call them up for anappointment and they're like
(22:52):
great, we have an opening in sixweeks.
And I was devastated.
I was like I've been in kidneyfailure, I've been in pain.
I didn't know what to do.
I humped the phone.
I'm not happy.
Well, that wasn't good enoughfor Emma.
So Emma called them back andshe said looking for an
(23:12):
appointment.
Here's the situation.
By the way and this was on aFriday, by the way, we're cash
pay.
And they said oh, we can seeyou Tuesday.
So I get in to see thisprovider Tuesday.
I brought my MRI results that Ihad done a couple months ago.
I brought it in on CD.
I wasn't going to let themdeduplicate Again.
I'm cash pay.
Why pay for another MRI?
Why have your health plan payfor another MRI when I just had
(23:34):
one?
So they looked up the MRI,asked me a bunch of questions.
This doctor was known forminimally invasive surgeries and
he said I recommend amicrodiscectomy.
And that, to me, was music tomy ears because, knowing the
different types of surgery outthere, that is a 45 minute
procedure.
(23:54):
It's outpatient, it's notfusing anything, it's not
inserting anything, it'sliterally.
They make a tiny incision inyour back and they slice off the
part of the bulging disc that'shitting the nerve that's
causing the pain.
So I said, great, let's do it.
And he said, okay, it's goingto take us about six to eight
weeks to get all the paperworkdone, get you scheduled.
And I said I'm cash pay.
And he said, oh well, how'sTuesday?
(24:15):
So within a nine day period Iwent from calling the doctor's
office to waking up in recoverywith my leg pain gone for the
first time in nine months.
Now.
He gave me more opioids by theway, as a quick side note, took
(24:37):
it less as prescribed.
A couple days after the surgeryI realized small incision, I
don't need it.
I went through the only andworst withdrawal symptoms of my
life, again, less thanprescribed, threw them away
early.
Just a word of caution, people.
I can better understand theopioid epidemic now and how it
(24:57):
starts with doing what you'retold to do by your doctor and
how it starts with doing whatyou're told to do by your doctor
.
So anyway, what I realized fromthis experience was the power
of cash pay.
Now let's get to the finances ofthings for a quick moment.
The surgeon bill, right off thebat, was $1,200.
(25:17):
That seemed extremelyreasonable to me.
Then I get the hospital billOutpatient 45-minute procedure
$59,000 was the bill.
So now I have that sharingprogram, although I don't expect
them, nor do I want them, topay $59,000.
So I call them up, I also usethe negotiators of their service
(25:40):
, and that $59,000 bill wasreduced to $1,500.
So for $2,900, which is lesssubstantially than most people's
out-of-pocket under theirhealth plan, I went within nine
days from consult to pain-freeand I just don't see how that
(26:03):
could exist in any othercircumstance.
Speaker 1 (26:07):
And the magic words were cash, pay.
Speaker 3 (26:10):
Cash pay.
That was magic from an accessperspective and that was magic
from a financial perspective.
One of the things thatproviders are feeling a lot of
pain from is the carriers arefloating reimbursements.
I mean, they're paying outhundreds of millions to even
billions of dollars a monthcollectively, nationally,
especially the large nationalcarriers, and so the longer they
(26:33):
float that, even more so inthese high interest rate
environments that we have today.
They're making a ton of moneyon that float.
Today they're making a ton ofmoney on that float, and so to
pay them either same day orimmediately, or even within 30
days, brought a lot of power forboth access and finance.
Speaker 1 (26:52):
The question, though, is how do you take that
paintbrush and turn it into theroller that we need?
Speaker 3 (26:59):
So there are a few solutions that have attempted to
do that, but we've actuallyworked on one specifically where
we are making.
We've done some cash pay modelsand I know a lot of advisors
that are probably listening tothis have done cash pay add-ons,
cash pay bolt-ons.
The challenge is you aregetting table scraps at best If
(27:21):
you're working with a PPOnetwork navigating around.
That is sometimes contractuallyprohibited at best and very
difficult from both a providerand from a patient perspective
Once that patient self-refersthem to an orthopedic surgeon.
That's part of a large healthsystem.
They're in this flow that theydon't even realize is in the
best interest of part of a largehealth system.
(27:42):
They're in this flow that theydon't even realize is in the
best interest of the doctor inthe health system, but they
think it's in their bestinterest and changing that flow
is really difficult.
So we started to exploresolutions of how do we make
these solutions first and reallythe magic to resolving not just
(28:04):
the challenges withreference-based pricing and not
just the challenges of gettingpeople to take advantage of
cash-based situations, butchanging the entire dynamic of
the dysfunction of healthinsurance that I mentioned a few
minutes ago, which was havingit try to also cover the very
frequent not severe events hasbeen direct primary care.
(28:26):
The way that we embed directprimary care is and we typically
offer this as a plan optionbecause employers are very
hesitant to offer a plan inwhich these rules that I'm about
to share exist but we offer aDPC option in which it is a
richer plan than the employeehas probably ever had in their
lifetime and if there arepayroll contributions between
(28:48):
the two plan options the secondone being one where they can
kind of go anywhere usingreference-based pricing and
direct contracting the DPC planoption is much richer and less
money out of their paycheck.
The caveat is is we're going tocurate a relatively small
selection of direct primary careproviders and that is going to
be your primary care home.
Now we bring these DPCproviders to the employee
(29:12):
meetings because we think it'svery strange in retrospect and I
did it for many years, but itseems very strange to have a
healthcare meeting and not havea healthcare provider at the
healthcare meeting, which iswhat we've done for years.
I liken it to teaching your kidto drive by, sitting them at the
coffee table and going throughall the provisions of the Geico
insurance policy and thenhanding them the keys and saying
(29:33):
go be a good driver.
That's what we do at OpenEnrollment.
We go through all theprovisions of the drug formulary
and when the deductible applies, and then we hand them an
unlimited ID card and say go bea good patient.
It's nonsensical when youreally think about it, even
though I myself, admittedly,embraced it for many years.
So I know a lot of people arebecoming more accustomed and
(29:54):
familiar with direct primarycare.
But I'm not even going to goover the basics because I think
most people know people get moreaccess to care, they get better
clinical outcomes.
But I want to talk about it froma financial perspective for a
minute.
When a health plan embeds directprimary care and pays the
monthly membership fee, which isthe way we build our plans and,
(30:16):
most importantly, requires thepatient to consult with the
direct primary care providerbefore they can go to a
specialist, which inherentlygives that DPC the patient to
consult with the direct primarycare provider before they can go
to a specialist, whichinherently gives that DPC the
ability to potentially treatthat problem without a claim
ever occurring, right, becausewe have that monthly membership
fee.
But what this does is itcorrects the dysfunctional
(30:37):
dynamic in insurance, becausenow we are allowing the DPC to
handle all the very frequent,not severe events.
The employer is paying a fixedmonthly fee for that.
You don't need to insure aknown fixed cost, you need to
insure an unknown, unfixed cost.
(30:59):
And so from a plan perspectivenot from the employee
perspective, I'm talking aboutfrom the plan perspective we no
longer need to ensure those veryfrequent, not severe events and
the employer because it's aself-funded plan model combined
with their stop loss is now onlypaying for the infrequent
(31:21):
severe events.
Speaker 1 (31:22):
That's all they're paying for, and that is an
awesome place to leave ourconversation for today.
David Conterno, old friend,president and founder of ePower
Benefits.
David, thank you for yourinsight and for sharing your
personal stories with us.
Speaker 3 (31:35):
It was my pleasure, and anyone that wants to reach
out, even on a personal level,it's easy to find me out.
Speaker 1 (31:48):
Even on a personal level, it's easy to find me.
I want to give a quick shoutout to our sponsor and our
producer, hatcher Media.
Hey, if you need podcastproduction or professional
graphic design, josh Hatcher isthe expert to contact.
For more information, visit himat hatchermedianet.
That's H-A-T-C-H-E-R Media dotnet.
Speaker 2 (32:04):
This Shift Shapers podcast is copyrighted content
and may not be reproduced inwhole or in part without the
express written permission ofShift Shapers Solutions LLC.
Copyright 2024.
Plan design has evolved beyond things like
reference-based pricing andother first-generation
alternatives.
What's new, what's coming downthe pike, and how has a personal
experience informed one of ourindustry's foremost disruptors?
We'll find out on this episodeof Shift Shapers.
Speaker 2 (00:18):
Change either energizes or paralyzes.
The choice is yours.
Energizes or paralyzes, thechoice is yours.
This is the Shift Shaperspodcast, bringing the employee
benefits industry interviewswith individuals and companies
who are shaping the industryshifts.
And now here's your host, DavidSaltzman.
Speaker 1 (00:40):
And to help us answer that question, we've invited
David Contarno, president andfounder of ePower Benefits.
Welcome, david.
Hi, david, thanks for having me.
Oh, it's our pleasure.
Thanks for being on the podcast.
You are an anomaly.
You are a third-time guest, soyou must be doing something
right.
Speaker 3 (00:56):
I'm honored.
Thanks for having me.
Speaker 1 (00:58):
Oh, it's our pleasure .
Speaker 3 (01:08):
So let's start out with a little bit about your
background because, as hard asit is to believe at our vintage
in the industry, there are stillsome people who don't know how
we got to be doing what we'redoing.
For me, I started in theinsurance industry when I was 12
years old, believe it or notNow.
That was telemarketing lifeinsurance for an agent of
Prudential, but I was quitesuccessful at it.
But it was actually at 17 thatI found myself in the benefits
space.
I had graduated high school alittle early, went to college
for a year in photographynothing to do with insurance and
(01:29):
then went to work for my fatherin an unrelated industry.
The family dynamics didn't workout so well pretty quickly and
my best friend and roommate atthe time he worked for his dad
and him and his dad had a smalllittle group benefit shop on
Long Island.
It was just the two of them andan assistant and I basically
quit the job with my dad on aFriday, showed up with my best
friend Monday morningunbeknownst to his dad, and his
(01:52):
dad sort of took me under hiswing.
His dad was more the salesmantype, whereas his son was kind
of more the in-office accountmanager type, and so there was
this kind of instant bondbetween he and I and I started
running to the very ends of LongIsland for two life plumber
groups with fully insured healthplans.
And that's how I started in thehealth insurance and employee
(02:13):
benefits game.
Very simple, humble beginningsand I fought my way tooth and
nail to grow in the sort oftraditional world and was quite
successful.
For many years I grew a coupleof agencies, bought some, sold
some, but you know, eventually Ihad an epiphany.
Speaker 1 (02:37):
And we'll talk more about that.
I mean, you know it'sinteresting in today's parlance.
For most people they know thephrase creative disruption from
Clayton Christensen and hisbooks.
I would say that you are moreof an OG type.
You're back with AlfredSchumpeter who, back at the turn
of the century, created thephrase creative destruction,
because I think one of thethings that you realized early
on was that what was therewasn't working and it couldn't
be fixed.
(02:57):
It needed to be replaced orbroken.
Tell us a little bit about howthat epiphany came about.
Speaker 3 (03:03):
Well, actually it occurred when I was at a open
enrollment meeting for a renewalfor a client and it was a year
in which, unsurprisingly, therates had gone up more than the
employer could stomach.
And this actually happened tobe a physician's practice.
They were ophthalmologicalsurgeons and, of course, most of
the employees were staffmembers, making far less than
(03:24):
the four or five surgeons thatown the practice.
They were ophthalmologicalsurgeons and, of course, most of
the employees were staffmembers, making far less than
the four or five surgeons thatown the practice.
And in order to offset some ofthat premium increase, the
practice administrator haddecided to go with a higher
deductible and higherout-of-pocket.
And this was back whendeductibles were like a thousand
bucks, which seems low bytoday's standards, but it was a
(03:46):
thousand dollar deductible and,if I remember right, it was a
three thousand dollar total outof pocket.
And I remember looking aroundat these people and saying,
other than the doctors, not asingle one of these people
probably has three thousanddollars laying around, let alone
three thousand dollars extrayear after year if they're
dealing with chronic conditions.
And this was before HSAs evenexisted.
(04:08):
So the deductibles wereapplicable in a much more
limited fashion than they are inmany people's plans today.
But even so, when I mentionedwhat the out-of-pocket was going
up to, I saw this look of fearin some of their eyes.
Saw this look of fear in someof their eyes and I think part
of it was because they were in amedical practice and they
specifically were in a surgeon'soffice, where a lot of people
(04:29):
were more being exposed to thedeductible than primary care
physicians offices, for example.
And so they recognize thatthere's a real possibility, and
maybe even a known possibility,if they were dealing with some
chronic conditions that theywere going to be exposed to this
out of pocket, were dealingwith some chronic conditions,
that they were going to beexposed to this out-of-pocket.
And at a similar time, Iremembered something that many
(04:52):
years prior to that because thiswas 15, 16, 17 years into my
now 32-year career when Istudied for my insurance exam up
in New York State, part of thatexam was the history of
insurance.
Why did humans invent insurance?
When did it first come about?
And my recollection is that itwas communities coming together
because, you know, someone inthe community had a house fire
(05:13):
and the house burned down andthey didn't have the money to
rebuild, and so they pooledtheir money together as a
community, they all put in alittle bit of money and then
they shared those resources inthe event that somebody had a
catastrophic event.
And I was reminded thatinsurance was developed by
humans and, to this day, in allinstances, with one notable
(05:33):
exception is meant to do onething and only one thing, and
that is to protect us fromcatastrophic financial loss.
That's what life insurance does, that's what homeowners
insurance does, that's what lifeinsurance does, that's what
homeowner's insurance does,that's what auto insurance does,
that's what workers' compinsurance does and liability
insurance.
But I started to see statisticslike health insurance not doing
(05:54):
that, bankruptcy being thenumber one, or medical bills
being the number one cause ofbankruptcy, with a lot of those
people having had healthinsurance.
And I said to myself there's acouple of things that are
different about health insuranceas we know it than every other
type of insurance.
Number one, it's not protectingus from catastrophic financial
loss.
Number two, we are expecting itto cover things that we expect
(06:17):
other insurance to cover, whichI would describe as severe
events that are unlikely tooccur the heart attacks in
healthcare, the hurricanes andthe tornadoes.
But we've also come to expectit, and I think this was born
out of the HMO model in the 70sand 80s that became popular to
cover the very frequent notsevere events.
(06:40):
And if you think about it fromjust purely an insurance
financial perspective, take allyour health care, health
insurance knowledge out of theequation.
Insurance doesn't function longterm when it's trying to cover
the infrequent severe and thevery frequent not severe.
It's just not.
Insurance is not a vehicle thatis designed or adequate for
(07:03):
doing that.
And so these realizations reallystarted to get me to ask a lot
of questions, and I reallydidn't get a lot of answers as a
matter of fact, because I had alarge agency at the time.
I had access to carrier execsand hospital execs and some of
the large broker firms, execs,and when I asked them why do we
(07:24):
continue to get worse clinicaloutcomes every year in the
healthcare system and pay morefor it?
The answer among them wasremarkably similar it's not our
fault, it's their fault, and whothey pointed to might have been
different, but it was in thatmoment that I said to myself
what is my contribution to thisand, more importantly, what
(07:45):
control do I possess overchanging that?
And it was that realizationthat was really the catalyst for
the change in how I approachedwhat it is that I do.
Speaker 1 (07:55):
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And now back to ourconversation.
It's interesting.
We went, you know, kind of tofor a while.
With that change, we went tosome what I call blunt
(09:43):
instruments like reference-basedpricing, and you know that had
a place because there wasn't awhole lot else to hang on to.
What's happened since then?
Bring us up to date and then wecan talk a little bit about
what you see coming in thefuture.
Speaker 3 (09:59):
Reference-based pricing is an extremely powerful
tool.
I again went to one year ofcollege for photography, so I
don't have an MBA, I didn't goto school for business.
(10:23):
But when that epiphany that Ijust mentioned occurred to me, I
realized that while I knew alot about insurance in other
words, I knew a lot about themoney going into the plan
whether it's realized that themoney we have to put into the
plan in our world, collectivelybetween the employer and the
employee, slash patient is adirect result of the vacuum left
by the money coming out of theplan.
(10:44):
And if I don't get tounderstand that and I don't get
to fundamentally change that,then I'm never going to change
the direction that we're goingwith the money going into the
plan, then I'm never going tochange the direction that we're
going with the money going intothe plan.
And reference-based pricing isa really powerful tool from a
financial perspective for notonly changing the amount of
money going out of the plan but,far more importantly, to create
(11:05):
a much more logical andsensible way of pricing,
something in which the price isnot determined until
post-rendering of services.
That in and of itself isrelatively unique to healthcare.
There's very few things we buyor consume, where not just the
consumer but the provider ofthat good or service doesn't
(11:25):
know the price of what it'sgoing to be until after services
are rendered.
So it creates an inherentlydysfunctional dynamic that is
very difficult to overcome, andreference-based pricing, at at
its core, is at least a moresensible and, I believe, fair
although a lot of providerswould disagree way to determine
what the price of care should be, considering the care has
(11:47):
already been rendered, but itcomes with a lot of problems.
The first issue is the initialbold and I give a lot of credit
to the very firstreference-based pricing vendors,
brokers and TPAs.
They took a very aggressivestance in terms of how they
priced it, and the part of thereason they did that was because
(12:09):
, hey, there was no precedent,so why not?
But by paying a lower amount toa provider, it allowed them to
retain more of the savings forthemselves, which was necessary
for them to then defend thispayment model.
That not only had providersnever heard of, but once they
(12:29):
realized what it was felt wasunfair.
Once they realized what it wasfelt was unfair, and so I give a
lot of credit to thosetrailblazers.
However, it's created a legacythat exists today, where there
are many providers that arestill very resistant to any
pricing known as reference-basedpricing, especially when
Medicare is the metric by whichwe use to find some sort of
(12:53):
multiple.
Medicare has a very negativeconnotation from a financial
perspective when you speak topeople in financial positions at
health care providers andhealth systems in particular.
There are ways to ease that,there are ways to overcome it.
Our philosophy withreference-based pricing has
always been pay the providersmore.
Pay the people that arerepricing it less, because you
(13:15):
don't need them as much.
When you're paying theproviders more, it's more
accepted.
But again, even in that model,there are still multiple issues
and, more importantly, thatmodel in no way is addressing
improving clinical outcomes.
So when I started to feel thesepains and frankly, we've lost
(13:38):
business over the friction thatcomes with pure reference-based
pricing the very next thing Isaid is what if I created
agreements with providers,essentially creating my own
quote network and I use my airquotes just because to me a
network is akin to a four-letterword.
But what if I could find someproviders that I could speak to
(14:03):
and bring some benefits to themin exchange for some benefits to
us and to my clients?
Now, their biggest fear atfirst was not so much how much
they were going to get paid, butif that amount were a lesser
amount than they were gettingpaid from the traditional PPO
networks, would those PPOnetworks find out and then want
(14:26):
lower pricing?
And at first I bought into thatphilosophy.
Right, if someone's paying alower price, why wouldn't
someone else want to also paythat lower price?
Now I've learned more that bothcarriers and providers benefit
from escalating and inflatingpricing, so that dynamic doesn't
actually exist.
But that was the thinking atthe time, and so at the
(14:48):
beginning of these conversationsI had to sign a lot of non
disclosures.
I had to make them exclusive toone particular employer.
A lot of times some providerswouldn't do it unless I had
massive scale behind me, andsome wouldn't do it unless I had
a very small group of patientsbehind me, and so much.
Like we see in many areas of thehealthcare system, there's a
lot of inconsistencies, but wewere able to do things for
(15:13):
providers that over the years,and even more so today, is of
great benefit to the providers,which is waving out of pockets
as deductibles and out ofpockets have gone up.
Hospitals write off on average75% of patient out of pocket.
But think about this dynamicfor a minute the more out of
pocket they write off, the morepressure they put for higher
(15:35):
reimbursements from theproviders.
The higher the reimbursementsgo, the higher the premiums in
the market go.
The higher the premiums go, thehigher the deductibles go, the
more they write off.
And we just have been on thiscircling the drain.
And so I said to myself likehow do we, how do we get past
this?
And we've been.
We've been really successful 18or 19,000 direct contracts with
(16:00):
providers around the country.
Now, admittedly, a lot of themare with ASCs, smaller hospitals
.
We've actually developed somewith some larger hospital
systems in some parts of thecountry, but to far less of a
success than with the smallerones.
Now that brings me to one otherphilosophy, and many of you know
(16:24):
my partner in many ways, emma,and Emma has helped me see a
more empathetic side to this.
Employers have developed thisnotion that when it comes to
health insurance, they mustallow their employees to go
(16:46):
wherever they want, wheneverthey want, for whatever they
want, and I find that veryinteresting, in particular in
light of someone who issimilarly injured.
But on the job Workers' comphave been embracing things like
reference-based pricing andnarrow networks and limited
providers for years, and forsome reason, employers think
that if they're hurt on the jobit's okay for them to make more
(17:09):
fiduciary decisions than whenthey're sick or injured not on
the job, and I don't understandthat there is no.
If any employer is listening tothis, not only do you not have
an obligation to give youremployees the ability to go
wherever they want to go, but, Iwould argue, in doing so,
you're actually breaching yourfiduciary responsibility,
(17:31):
because it gives them theopportunity to go to a high-cost
and or low-quality place, whichdoesn't just harm that patient,
it harms the company, it harmsall the other participants on
the plan.
So this notion that peopleshould be able to go wherever,
whenever is something that Istruggle with.
But I will tell you, if I takethat hardline approach and I've
tried it's very unlikely to getan employer to say yes and or
(17:55):
stick with it long term, and sowe had to come up with a
solution.
No-transcript, hypocritical.
(18:33):
If I had a Blue Cross and BlueShield ID card in my wallet, I
don't, and I haven't for years.
What I do have is a directprimary care membership for me
and my family.
We pay for it, for ouremployees as well.
And then I have a in my case, anon-faith-based sharing program
behind it which is not healthinsurance.
It doesn't work like healthinsurance, it doesn't have
(18:54):
regulations and mandatedcoverages like health insurance,
and so there's a lot oftheoretical financial risk, or
more theoretical financial risk,but, remember, people are going
bankrupt with health insurance.
So I question whether or notthat risk is greater or not.
But what this allowed me to dowas present myself as cash pay.
(19:14):
So last year, in 2024, inJanuary, give or take, I
developed a really bad shootingpain down the right side of my
leg, the outside of my right leg, and I pretty much knew right
away it was sciatic leg pain,but it was pretty bad.
And just from what I do, I knewthat if I went to a back
(19:36):
surgeon, they were going torecommend back surgery.
I know there's a lot ofunnecessary back surgeries and I
know the most likely outcome ofback surgery in the United
States is additional backsurgery.
I know there's a lot ofunnecessary back surgeries and I
know the most likely outcome ofback surgery in the United
States is additional backsurgeries, and so I did
everything I could to avoid that, and so I tried physical
therapy, I tried stretchingexercises, I went to a
chiropractor, I mean, I did allthose things but it wasn't
(20:00):
working, or at least it was onlyproviding mild and temporary
relief.
I had an MRI.
It showed that I had a bulgingdisc between L4 and L5.
And luckily, I know a bunch ofdoctors and one of the things
that a doctor, a very gooddoctor friend of mine, said to
(20:21):
me is David, you have symptomsin which the MRI matches the
symptoms you have.
That means, and after tryingeverything else, that means that
you might be a candidate forsurgery.
Now, as a side note, while I wastrying to manage all this pain,
(20:42):
I was taking over-the-counteribuprofen, and a lot of people
think prescription drugs aresomewhat innocuous, let alone
over-the-counter.
But I want to let you peopleknow that the ibuprofen,
combined with a stomach bug thatI got, caused me to become very
dehydrated, unbeknownst to me.
I just knew that I was feelingworse and worse, and worse and,
(21:05):
prior to actually consultingwith a surgeon, I decided to get
an epidural to try and just getsome relief from this pain.
And when I went to thisorthopedic urgent care center to
get the epidural, they took myblood pressure just as a matter
of course.
And it was 71 over 44.
And for anyone knows bloodpressure, the doctor was kind of
shocked that I was able to evenstand upright, which I was
(21:27):
barely able to do.
I wound up being rushed to thehospital and I was in acute
kidney failure.
I had 100% reduction in onekidney and 90% reduction in the
other kidney, all due todehydration.
All due to dehydration.
Again.
Another word of caution forpeople is when I was in the
(21:47):
hospital here I am in massivekidney failure and of course the
doctors, that's their numberone concern.
But they asked me what mynumber one concern was and I
said it's my sciatic leg pain.
Well, they wind up giving meopioids, oxycodone, in the
hospital.
You know they dosed it out tome at whatever the recommended
(22:08):
doses was, a few times a day.
They wound up giving me massivefluids over the course of
several days and I went homewith a script for oxycodone.
I took it less than prescribed.
It had some moderate relief,but I finally resigned myself to
exploring surgery.
You know, again, knowing thehealth system a little better
(22:30):
than most, I had a resource toreach out to a nationally
recognized orthopedic surgeonand I said this is what's going
on.
If you were in the Charlotte,north Carolina area, who would
you send your family to?
And she gave me a name, so Icall that up.
They're part of an independentorthopedic practice that happens
to be pretty well respected inthe area.
I call them up for anappointment and they're like
(22:52):
great, we have an opening in sixweeks.
And I was devastated.
I was like I've been in kidneyfailure, I've been in pain.
I didn't know what to do.
I humped the phone.
I'm not happy.
Well, that wasn't good enoughfor Emma.
So Emma called them back andshe said looking for an
(23:12):
appointment.
Here's the situation.
By the way and this was on aFriday, by the way, we're cash
pay.
And they said oh, we can seeyou Tuesday.
So I get in to see thisprovider Tuesday.
I brought my MRI results that Ihad done a couple months ago.
I brought it in on CD.
I wasn't going to let themdeduplicate Again.
I'm cash pay.
Why pay for another MRI?
Why have your health plan payfor another MRI when I just had
(23:34):
one?
So they looked up the MRI,asked me a bunch of questions.
This doctor was known forminimally invasive surgeries and
he said I recommend amicrodiscectomy.
And that, to me, was music tomy ears because, knowing the
different types of surgery outthere, that is a 45 minute
procedure.
(23:54):
It's outpatient, it's notfusing anything, it's not
inserting anything, it'sliterally.
They make a tiny incision inyour back and they slice off the
part of the bulging disc that'shitting the nerve that's
causing the pain.
So I said, great, let's do it.
And he said, okay, it's goingto take us about six to eight
weeks to get all the paperworkdone, get you scheduled.
And I said I'm cash pay.
And he said, oh well, how'sTuesday?
(24:15):
So within a nine day period Iwent from calling the doctor's
office to waking up in recoverywith my leg pain gone for the
first time in nine months.
Now.
He gave me more opioids by theway, as a quick side note, took
(24:37):
it less as prescribed.
A couple days after the surgeryI realized small incision, I
don't need it.
I went through the only andworst withdrawal symptoms of my
life, again, less thanprescribed, threw them away
early.
Just a word of caution, people.
I can better understand theopioid epidemic now and how it
(24:57):
starts with doing what you'retold to do by your doctor and
how it starts with doing whatyou're told to do by your doctor
.
So anyway, what I realized fromthis experience was the power
of cash pay.
Now let's get to the finances ofthings for a quick moment.
The surgeon bill, right off thebat, was $1,200.
(25:17):
That seemed extremelyreasonable to me.
Then I get the hospital billOutpatient 45-minute procedure
$59,000 was the bill.
So now I have that sharingprogram, although I don't expect
them, nor do I want them, topay $59,000.
So I call them up, I also usethe negotiators of their service
(25:40):
, and that $59,000 bill wasreduced to $1,500.
So for $2,900, which is lesssubstantially than most people's
out-of-pocket under theirhealth plan, I went within nine
days from consult to pain-freeand I just don't see how that
(26:03):
could exist in any othercircumstance.
Speaker 1 (26:07):
And the magic words were cash, pay.
Speaker 3 (26:10):
Cash pay.
That was magic from an accessperspective and that was magic
from a financial perspective.
One of the things thatproviders are feeling a lot of
pain from is the carriers arefloating reimbursements.
I mean, they're paying outhundreds of millions to even
billions of dollars a monthcollectively, nationally,
especially the large nationalcarriers, and so the longer they
(26:33):
float that, even more so inthese high interest rate
environments that we have today.
They're making a ton of moneyon that float.
Today they're making a ton ofmoney on that float, and so to
pay them either same day orimmediately, or even within 30
days, brought a lot of power forboth access and finance.
Speaker 1 (26:52):
The question, though, is how do you take that
paintbrush and turn it into theroller that we need?
Speaker 3 (26:59):
So there are a few solutions that have attempted to
do that, but we've actuallyworked on one specifically where
we are making.
We've done some cash pay modelsand I know a lot of advisors
that are probably listening tothis have done cash pay add-ons,
cash pay bolt-ons.
The challenge is you aregetting table scraps at best If
(27:21):
you're working with a PPOnetwork navigating around.
That is sometimes contractuallyprohibited at best and very
difficult from both a providerand from a patient perspective
Once that patient self-refersthem to an orthopedic surgeon.
That's part of a large healthsystem.
They're in this flow that theydon't even realize is in the
best interest of part of a largehealth system.
(27:42):
They're in this flow that theydon't even realize is in the
best interest of the doctor inthe health system, but they
think it's in their bestinterest and changing that flow
is really difficult.
So we started to exploresolutions of how do we make
these solutions first and reallythe magic to resolving not just
(28:04):
the challenges withreference-based pricing and not
just the challenges of gettingpeople to take advantage of
cash-based situations, butchanging the entire dynamic of
the dysfunction of healthinsurance that I mentioned a few
minutes ago, which was havingit try to also cover the very
frequent not severe events hasbeen direct primary care.
(28:26):
The way that we embed directprimary care is and we typically
offer this as a plan optionbecause employers are very
hesitant to offer a plan inwhich these rules that I'm about
to share exist but we offer aDPC option in which it is a
richer plan than the employeehas probably ever had in their
lifetime and if there arepayroll contributions between
(28:48):
the two plan options the secondone being one where they can
kind of go anywhere usingreference-based pricing and
direct contracting the DPC planoption is much richer and less
money out of their paycheck.
The caveat is is we're going tocurate a relatively small
selection of direct primary careproviders and that is going to
be your primary care home.
Now we bring these DPCproviders to the employee
(29:12):
meetings because we think it'svery strange in retrospect and I
did it for many years, but itseems very strange to have a
healthcare meeting and not havea healthcare provider at the
healthcare meeting, which iswhat we've done for years.
I liken it to teaching your kidto drive by, sitting them at the
coffee table and going throughall the provisions of the Geico
insurance policy and thenhanding them the keys and saying
(29:33):
go be a good driver.
That's what we do at OpenEnrollment.
We go through all theprovisions of the drug formulary
and when the deductible applies, and then we hand them an
unlimited ID card and say go bea good patient.
It's nonsensical when youreally think about it, even
though I myself, admittedly,embraced it for many years.
So I know a lot of people arebecoming more accustomed and
(29:54):
familiar with direct primarycare.
But I'm not even going to goover the basics because I think
most people know people get moreaccess to care, they get better
clinical outcomes.
But I want to talk about it froma financial perspective for a
minute.
When a health plan embeds directprimary care and pays the
monthly membership fee, which isthe way we build our plans and,
(30:16):
most importantly, requires thepatient to consult with the
direct primary care providerbefore they can go to a
specialist, which inherentlygives that DPC the patient to
consult with the direct primarycare provider before they can go
to a specialist, whichinherently gives that DPC the
ability to potentially treatthat problem without a claim
ever occurring, right, becausewe have that monthly membership
fee.
But what this does is itcorrects the dysfunctional
(30:37):
dynamic in insurance, becausenow we are allowing the DPC to
handle all the very frequent,not severe events.
The employer is paying a fixedmonthly fee for that.
You don't need to insure aknown fixed cost, you need to
insure an unknown, unfixed cost.
(30:59):
And so from a plan perspectivenot from the employee
perspective, I'm talking aboutfrom the plan perspective we no
longer need to ensure those veryfrequent, not severe events and
the employer because it's aself-funded plan model combined
with their stop loss is now onlypaying for the infrequent
(31:21):
severe events.
Speaker 1 (31:22):
That's all they're paying for, and that is an
awesome place to leave ourconversation for today.
David Conterno, old friend,president and founder of ePower
Benefits.
David, thank you for yourinsight and for sharing your
personal stories with us.
Speaker 3 (31:35):
It was my pleasure, and anyone that wants to reach
out, even on a personal level,it's easy to find me out.
Speaker 1 (31:48):
Even on a personal level, it's easy to find me.
I want to give a quick shoutout to our sponsor and our
producer, hatcher Media.
Hey, if you need podcastproduction or professional
graphic design, josh Hatcher isthe expert to contact.
For more information, visit himat hatchermedianet.
That's H-A-T-C-H-E-R Media dotnet.
Speaker 2 (32:04):
This Shift Shapers podcast is copyrighted content
and may not be reproduced inwhole or in part without the
express written permission ofShift Shapers Solutions LLC.
Copyright 2024.
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