June 10, 2025 • 24 mins
Rethinking PPOs: How High-Performance Networks Deliver Value | ShiftShapers
In this episode of ShiftShapers, host David A. Saltzman sits down with Scott Smith, founder and CEO of Logro Network, to discuss a revolution in health plan design: the nationally curated high-performance network. Scott unpacks the origins of PPOs, why the old “discount everything” approach is broken, and how a focus on total value—cost, quality, and outcomes—can transform employer health plans.
You’ll learn how Logro Network uses massive data sets and provider scoring to give members more choice and better information, all while helping plans rein in costs and fulfill their fiduciary duty.
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🔑 Key Takeaways from This Episode
📌 Why PPOs Are Stuck in the Past
Traditional networks focused only on unit cost, not total value—leaving members and plans exposed to higher downstream costs and mediocre quality.
📌 Volume and Discounts Aren’t Enough
Providers are leaving old PPOs as deep discounts become unsustainable. The cheapest care isn’t always the best, and a “race to the bottom” can cost more in the long run.
📌 High-Performance Networks = Data-Driven Choice
Logro Network’s national footprint scores providers on cost, quality, and appropriateness using over 50 billion claims—empowering members to pick the best care for their needs.
📌 Quality ≠ High Cost
Surprisingly, the best providers are often not the most expensive. High-quality care can lower total cost of care through fewer complications and better outcomes.
📌 Member Experience Is Central
With transparent, easy-to-read provider profiles (using AI to simplify 300+ metrics!) and broad network access, members get more control, less disruption, and the right information to make informed decisions.
📌 A Win for Employers and Brokers
Plans using high-performance networks can see immediate cost reductions, better renewal rates, and lower medical loss ratios—while meeting growing fiduciary expectations.
⏱️ In This Episode
- 00:00 Introduction to High Performance Networks
- 00:47 Guest Introduction: Scott Smith
- 01:30 The Evolution of Networks
- 04:22 Challenges of Traditional Networks
- 07:09 Introduction to High Performance Networks
- 09:55 Building a High Performance Network
- 14:04 Member and Plan Benefits
- 21:02 National Coverage and Future Plans
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
We all know about PPO networks, but there's a new
kind of network in town and itmay just be a better fit for
some plans.
What is a nationally curatedhigh-performance network, and
why would a client want to useone?
We'll find out on this episodeof Shift Shapers.
Speaker 2 (00:19):
Change either energizes or paralyzes.
The choice 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
Scott Smith, founder and CEO ofLogro Network, to the podcast.
Welcome, scott, great to behere, thank you it's our
pleasure.
Thank you for being here andthank you for helping us
understand what this newfangledthing is that you're dealing
with.
But let's start kind of alevel-set question.
Most people didn't wake up onemorning in seventh grade and say
(01:04):
I want to be in the insurancebusiness or I want to be in the
network business.
How'd you get to be doing whatyou're doing?
Speaker 3 (01:11):
That's a great question.
I was recruited by a goodfriend to become a CEO of his
national PPL network, and soI've been at this for, you know,
10 plus years, and I've learneda lot about the industry, about
what works well and whatdoesn't, and so that's why we're
here building a new networkcalled Logro Network.
Speaker 1 (01:31):
All right.
So let's go back in the WaybackMachine and let's just level
set.
How did networks come to be inthe first place?
Because you and I have bothbeen at this long enough to
remember when there were thesethings called indemnity plans
and you went wherever you wantedand the doctor sent them a bill
and they got paid and life wasgood.
How did networks happen and whydid they happen?
Speaker 3 (01:52):
Networks arose in the 80s as insurance companies were
building out providerorganizations which they wanted
to have members go to, and sothey negotiated discounts and
rates that those providerorganizations would accept and
from which they were then ableto put a directory together.
(02:13):
And you and I would go and seethat Dr Joe is in that directory
and here's his address, and I'dmake an appointment and go see
Dr Joe.
Was it just a cost play?
It turns out all these years ithas been a cost play.
It has always been on the unitcost of negotiating provider
discounts and how cheap can Ihave the provider provide those
(02:36):
services to me?
And so you see this arise andit's been, you know, problematic
because over the yearsproviders have been back and
forth getting asked to have moreand more discounts, and that's
the only game that PPOs bring tothe marketplace.
Speaker 1 (02:56):
Was the notion to drive profits or to be more
competitive so that you couldthen drive more profits to
different sides of the same coin?
Speaker 3 (03:06):
I'd say it is different sides of the same coin
.
It's well said, it is all abouteconomics and profit, and
therefore the insurer was ableto get more margin and also then
perhaps bring a product to themarketplace that was priced a
little bit less expensively.
And so all these years it'sbeen focused on one dimension of
(03:30):
that decision-making process,which is cost.
Speaker 1 (03:36):
And the reason the providers played along was the
networks were going to drivebusiness to their practices.
Speaker 3 (03:43):
Allegedly that's right and so it's a volume play.
How much volume of patients canI receive and am I willing to
accept at that discounted rate?
And today we're findingproviders are raising their
hands and saying I'm out, I amnot able or willing to continue
to service those patients at therates that you're asking me to.
(04:04):
You know kind of be paid for.
Speaker 1 (04:07):
So I mean, we've talked an awful lot on the
podcast recently about cash payand you know that seems to be
more attractive to a lot of docs.
For that very reason They've,you know, the how low can you go
?
Question.
I guess some of them have hitbottom.
So let's talk a little bitabout traditional networks.
What were the challenges, whatwere the problems, other than
(04:28):
the fact that obviously we'vedriven down cost to the bottom?
What were the challenges andwhat were the problems of
traditional networks?
Speaker 3 (04:41):
Yeah, I think traditional networks such as the
BUCAs, blues United, cigna andEtna certainly were only looking
at the unit cost and, secondly,they were making no
differentiation in the providersand how well the providers
performed, and so all providerswere equal as long as they were
(05:01):
on a roster that was part ofthat organization that they were
contracting with, and so that,as a member, we had no insights
as to whether Dr Joe or Dr Susiewas better than one or the
other for my particulartreatment and that kind of
belies.
Speaker 1 (05:13):
another question which is okay, the initial cost
is X, but if you go to a doctorwho's not as proficient as maybe
another doctor is or anotherprovider is, you have
post-surgical infections, youhave readmit rates, you have all
that kind of stuff.
So is it the case withtraditional networks that
sometimes the cheapest isn't thecheapest, 100% correct?
Speaker 3 (05:34):
Yeah, Many times, if you look at the total cost of
care, those things that you justspoke about readmissions and or
the place of service that thoseservices are rendered, about
readmissions and or the place ofservice that those services are
rendered, ie hospitals versus,or just you know hurt other
facilities, whether they're onlythe brand name pharmaceuticals,
the amount of the utilizationof radiology and is there waste
(05:58):
and other you know proceduresthat that particular doctor uses
, has all sorts of consequencesin the total cost of care.
And so cheap at the unit costlevel does not actually mean
better value and or, ultimately,lower total cost of care.
So plans have been chasingghosts.
(06:19):
I think they have beenone-dimensionally chasing what
they believe is the lowestdollar and then at the end of
the day, when you add up all ofthe other procedures that are
provided to a patient and theircare path, it turns out to be
(06:39):
more expensive.
I talked to a gentleman justrecently and he said, Scott, we
could save $15 on a unit costcharge but end up incurring
another $100,000 in additionalservices that were either
unnecessary or were poorperformance in the services that
the doctor provided.
So you have to be, as aconsumer, more in tune with the
(07:03):
entire spectrum of what is beingrendered by the provider.
Speaker 1 (07:08):
Is that what nationally curated
high-performance networks do?
Speaker 3 (07:13):
Well, there's an interesting question.
What I've uncovered in myprocess here is that what is
known as high-performancenetworks largely means a narrow
network, meaning once againthey're after the unit cost
discount, and they're achievingthat by limiting the provider
(07:33):
organizations that a patient cansee Clearly I'll use Dallas as
an example.
One HPN only has Baylor ScottWhite and their facilities and
doctors as the in-networkprovider.
They've excluded all the othermarket providers that now become
out-of-network.
So the member is forced, ifthey're going to be an
(07:54):
in-network and have the betterat least cost, they're forced to
go to the Baylor Scott White.
And so we're changing what wethink is high-performing
networks with low-growth network.
Speaker 1 (08:06):
Well and beyond those folks who have just summarily
said we're only going to allowthis particular group of
physicians and providers.
Markets have changed.
There used to be.
I remember years ago I wasworking for a division of
Medical Mutual of Ohio and inCleveland there were at the time
I don't know seven or eightmajor health systems, and today
(08:26):
I think there's two.
So the menu has gotten smallerand there's less choice.
To start with, is that part ofthe problem that you're trying
to solve?
Speaker 3 (08:46):
insured employers.
They're finding that theabrasion of forcing a member to
make a change with whom theyhave been seeing as a provider
is coming up with greaterresistance, and it is something
that you know.
Giving choice is important tohave what we would call a broad
network as opposed to the narrownetwork and therefore,
depending on your location andthe type of service of treatment
(09:09):
you're seeking, we want to makesure that members have choice
and have information to makebetter choices.
Speaker 1 (09:16):
Well, I mean even years ago, when I was running a
TPA, we did disruption analysisbut it was largely the C-suite
people who were the onesstroking the checks.
It wasn't necessarily for themembers.
Are members now part of thatcadre where they don't want the
friction and their plans don'twant it for them?
Speaker 3 (09:34):
I'd say the answer is yes, that the members are
really faced with some difficultchoices and are not equipped
with all the information.
And you mentioned thedisruption file.
Again, you're going at unitcost, You're going at what's the
cheapest that I can get thoseservices.
Speaker 1 (09:54):
So when you set out to start building a nationally
curated, high-performance PPOnetwork and you're including
quality metrics and whatnot, howdo you go about doing that?
What's that like?
Because it's a differentprocess, I suspect, than just
finding doctors and getting themto sign up for XYZ price.
Speaker 3 (10:12):
Yeah, that's correct.
We have built a nationalnetwork out of the gates based
on competitive contracting sothat the unit cost is on par
with the other BUCAs.
However, what we're bringing isquality and outcome data at the
individual provider, npi, andwe have accumulated over 50
(10:37):
billion claims from a variety ofsources, which includes the
Medicare, medicaid and 20different commercial data sets.
We have over 300 millionanonymized patient records that
we've been able to look at andseveral million of the providers
, and then we have scored thoseproviders to come up with an
(11:01):
overall score and then alsoscores on their effectiveness,
on their cost andappropriateness.
So those three big dimensionsare what produces an overall
quality score for an individualprovider compared to their peers
in their particular area.
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And now back to ourconversation From a plan
perspective, when you're goingand having a conversation or a
(13:12):
broker is going and having aconversation with an employer.
What's that conversation like?
What are they pitching thatthey weren't pitching before?
Speaker 3 (13:20):
Yeah, I think what we're pitching and the TPA or
broker's pitching is that thelow-growth network is going to
bring a better choice, forinformation to be transparent so
that a member can be informedon which providers they should
be choosing for their particulartreatment.
(13:43):
The second piece is it willyield about a 30% average
improvement in cost while alsodelivering better quality and
outcomes for the patient andtherefore the plan.
Everybody wins.
Speaker 1 (13:57):
It sounds like it's an easy decision from a
fiduciary perspective.
Yes, what does it look likefrom a member's perspective?
How do you message that tomembers when all of a sudden,
they hear the dreaded words newnetwork?
Speaker 3 (14:08):
Sure, well, I think there are a couple of things
that go into that.
One, we've been careful to haveboth our provider directory
have that information on usingthe traditional stars, but we
also include the stars relatingto those other dimensions of
appropriateness, effectivenessand cost.
And then, secondly, we includethis summary.
(14:31):
We've used some AI technologyfor the LLM is what they call it
to summarize those 300 metricson a given provider into a
simple-to-read paragraph thatallows a member to better
understand why is Dr Joe indeeda high-quality doctor for this
particular carrier suiting?
And so they'll have theinformation at their fingertips.
(14:53):
Secondly, it will be involvedand embedded in various apps,
applications, the mobile apps,so that a member can have it
conveniently where they go tolook for their plan decisions.
And third, any kind of carenavigator or coordinator will
also be equipped with this dataand helping to guide a member in
(15:14):
making those choices.
Speaker 1 (15:16):
What does the employee education component of
this look like?
Speaker 3 (15:20):
Well, I think it's to share about the importance of
you now can find the quality andoutcome information at your
fingertips.
We know that 75% of patients goto Google to search for their
provider and all they're gettingis the anecdotal reviews and
maybe there's some sort of stars, but it's not based on any
(15:43):
clinical data or performancedata.
But now we are educated andsaying this data is now
available, no different than ifyou're going to go buy a car or
a refrigerator, so that you canmake a better informed choice,
why Dr A is better than Dr B.
Speaker 1 (15:57):
But I mean, it is different than buying a car in
one respect and I wonder if youcome across this challenge and
if you do, how you solve it orhow the TPAs and brokers who
work with you solve it.
And that is that if I go outand I drop the money for a
Lamborghini, I'm getting a verydifferent beast than I am if I'm
getting a Toyota Corolla.
In medical care it's often areally inverse relationship that
(16:20):
a lot of times you'll find morequality at a lower cost point.
Does that freak people out anddo we have to educate folks
about that?
Speaker 3 (16:27):
I think we do, and you're absolutely correct.
The studies that we have comeacross and support what you just
said, that high quality doesnot necessarily equal high cost,
quality does not necessarilyequal high cost.
In fact, the inverse is foundthat you can get a knee
replacement with a high quality,some of the best performing
(16:47):
docs, and they are the lowestcost.
Why?
Because they eliminate theunnecessary procedures.
They are not going directly tothe most expensive procedure
when they could have othertreatment paths and their place
of service could be differentthan the most expensive place of
surgery, for example.
And so you know we can findcountless examples where you
(17:10):
know, in healthcare you know thebest providers are not the most
expensive.
Speaker 1 (17:16):
You know part of the reason that I raised the
question is you know, we everyin a while we'll touch base with
our friend Keith Smith out atthe Oklahoma Surgery Center and
he's been doing this kind ofstuff for a long time.
I guess they're the closestequivalent in recent times to a
specialty facility and he'sstill fighting the battle and
they're still having thoseconversations Even I mean, he's
(17:37):
been at it 15 years or maybeeven longer.
Does it take a while for thisto kind of sink in with folks?
Speaker 3 (17:45):
I think it has been an education process for this to
become more commonly understood, but there's momentum today
that this is indeed becomingbetter available to understand.
There are more companies thatare seeking to similar value
props and then some of theconsulting firms the Mercer's
and the Willis-Towers-Watson'shave published some great
(18:14):
studies that show the importanceof quality and the benefits,
whether it be related to theirCOE decisions, centers of
excellence or whether it be someof these other specialty
network folks that we know inthe industry.
But, contrasting that, we'rebringing something similar in
the sense of the value prop ofhigh quality and lower cost, but
we're bringing it across theentire spectrum of care, not
just a few procedure types orcondition types.
(18:34):
It's also interesting I touchedon this earlier but there's a
(18:54):
lot of with all these lawsuitsthat are floating around now
there's a lot of focus onfiduciary duties and plan
committees and whatnot and atcost and you have omitting kind
of the better value choice.
It's your responsibility reallyto look at how do we drive
overall total value, which istotal cost of care and better
outcomes for my members that aremy ultimate stakeholders in the
(19:18):
plan.
Speaker 1 (19:19):
Now, is this a play for self-funded plans only or
for TPAs self-funded plans?
I mean, where do you guys fit?
Speaker 3 (19:27):
We're addressing the TPA market here in 2025.
And we have a number of TPAsthat have started their
contracting process to bring ourproduct to market for this
particular benefit year forenrollment in fall of 25.
But in parallel, we have about600 of the Fortune 1000 benefit
(19:48):
leaders that we've been incommunication with over our
years and they're very excitedabout having an alternative to
the traditional PPO choices thatthey have been using year over
year.
Speaker 1 (19:58):
Is this kind of not getting into too much of your
business model?
But is this kind of a rentalnetwork, kind of it's a PEPM or
some kind of digestible way topay for this?
Speaker 3 (20:08):
It is definitely.
It's a PEPM, which is thecommon way for these primary
networks to be contracted, andwe've priced it in a manner that
is below the Bucca PEPM, so youget more value, You're going to
get a lower cost out of thegates and you're going to have
the quality built into thenetwork, so you'll accrue the
benefit of the additionalreduction in total cost of care.
(20:31):
And we're not going toparticipate in the shared
savings scheme that some of theother organizations do, because
it's too difficult to combat andattribute who created what
dollars of savings.
And you know, can I have my 50percent please?
So we just want to charge afair PEPM and deliver greater
value.
Speaker 1 (20:50):
Yeah, I mean that also creates some other
challenges that we're all awareof.
So I can certainly understandthat.
Where do you see this growing?
I can certainly understand that.
Where do you see this growing?
I mean, one of the things thatI asked you before we came
online was are you national?
Because I remember years ago,back in my TPA days, we'd go and
(21:10):
talk to networks and theyweren't national and we had
national clients and you know,we were more of a Taft-Hartley
shop so we had folks all overthe place between where they
were located, where the localswere, and travelers.
Are you a national network anddo you have coverage every place
?
Speaker 3 (21:27):
We are a national network so, out of the gates, we
have built out a nationalfootprint that can service the
50 states.
Some markets will be more denseand have more coverage, others
we are continuing to build outand optimize, but we do have the
ability to service clients andtheir groups throughout the 50
(21:49):
states.
Speaker 1 (21:51):
Beyond the quality issues, which you know certainly
, I think most employers arestill somewhat paternalistic and
want to make sure that theiremployees have the best possible
care and get well sooner, bothfor the employees and for the
employer's own selfish reasons.
I guess the question is whatkind of a delta might somebody
(22:12):
expect in price and over whatperiod of time?
When will they start seeingdifferentials that they can
actually quantify?
Speaker 3 (22:27):
Usually in the first year, or you complete the first
year and again industry showsthat one CFO reported that he
saw his renewal rates drop froma 40% the prior year to zero and
that his medical loss ratiowent from 120 down to 40, and
that he had 80% of hisparticipants his members
participate in choosinghigh-quality providers, so
(22:48):
there's immediate financialbenefit to the plan as well as
the benefits to the member,because often the plan design
that most TPA are bringing isthat they'll waive the member
costs, out-of-pocket costs bychoosing one of these
high-quality providers.
But all the while, in our model, if you still have a long-term
(23:10):
provider that you're comfortablewith and they're not the
high-quality, we're includingthat person in our network.
So it may have a plan designthat has some member
responsibility for that provider.
But overall we went and sentmembers to make better informed
choices.
Speaker 1 (23:26):
Where do you see this going in the next three to five
years?
Speaker 3 (23:29):
Yeah, our goal is to be a complete BUCA alternative
that's independent and so thatwe will be head to head with the
major insurers and ASOs, sothat people will have a choice
that they can say gee, logroNetwork is national, it has all
the different provider typesthat my members need and also
(23:51):
can provide the better value,and so we're a David and Goliath
story that's in the making.
Speaker 1 (23:59):
Well, and I love David's stories, so I'm right
there with you.
That's a great place to end ourconversation for today.
Scott Smith, founder and CEO ofLogro Network.
Scott, thanks for sharing yourexpertise with us.
Speaker 3 (24:09):
You're most welcome.
Thank you, David.
Speaker 1 (24:17):
I want to give a quick shout out 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 him at hatchermedianet.
That's H-A-T-C-H-E-R medianet.
Speaker 2 (24:35):
This Shift Shapers podcast is copyrighted content
and may not be reproduced inwhole or in part without the
express written permission of.
Shift Shapers podcast iscopyrighted content and may not
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Copyright 2024.
We all know about PPO networks, but there's a new
kind of network in town and itmay just be a better fit for
some plans.
What is a nationally curatedhigh-performance network, and
why would a client want to useone?
We'll find out on this episodeof Shift Shapers.
Speaker 2 (00:19):
Change either energizes or paralyzes.
The choice 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
Scott Smith, founder and CEO ofLogro Network, to the podcast.
Welcome, scott, great to behere, thank you it's our
pleasure.
Thank you for being here andthank you for helping us
understand what this newfangledthing is that you're dealing
with.
But let's start kind of alevel-set question.
Most people didn't wake up onemorning in seventh grade and say
(01:04):
I want to be in the insurancebusiness or I want to be in the
network business.
How'd you get to be doing whatyou're doing?
Speaker 3 (01:11):
That's a great question.
I was recruited by a goodfriend to become a CEO of his
national PPL network, and soI've been at this for, you know,
10 plus years, and I've learneda lot about the industry, about
what works well and whatdoesn't, and so that's why we're
here building a new networkcalled Logro Network.
Speaker 1 (01:31):
All right.
So let's go back in the WaybackMachine and let's just level
set.
How did networks come to be inthe first place?
Because you and I have bothbeen at this long enough to
remember when there were thesethings called indemnity plans
and you went wherever you wantedand the doctor sent them a bill
and they got paid and life wasgood.
How did networks happen and whydid they happen?
Speaker 3 (01:52):
Networks arose in the 80s as insurance companies were
building out providerorganizations which they wanted
to have members go to, and sothey negotiated discounts and
rates that those providerorganizations would accept and
from which they were then ableto put a directory together.
(02:13):
And you and I would go and seethat Dr Joe is in that directory
and here's his address, and I'dmake an appointment and go see
Dr Joe.
Was it just a cost play?
It turns out all these years ithas been a cost play.
It has always been on the unitcost of negotiating provider
discounts and how cheap can Ihave the provider provide those
(02:36):
services to me?
And so you see this arise andit's been, you know, problematic
because over the yearsproviders have been back and
forth getting asked to have moreand more discounts, and that's
the only game that PPOs bring tothe marketplace.
Speaker 1 (02:56):
Was the notion to drive profits or to be more
competitive so that you couldthen drive more profits to
different sides of the same coin?
Speaker 3 (03:06):
I'd say it is different sides of the same coin
.
It's well said, it is all abouteconomics and profit, and
therefore the insurer was ableto get more margin and also then
perhaps bring a product to themarketplace that was priced a
little bit less expensively.
And so all these years it'sbeen focused on one dimension of
(03:30):
that decision-making process,which is cost.
Speaker 1 (03:36):
And the reason the providers played along was the
networks were going to drivebusiness to their practices.
Speaker 3 (03:43):
Allegedly that's right and so it's a volume play.
How much volume of patients canI receive and am I willing to
accept at that discounted rate?
And today we're findingproviders are raising their
hands and saying I'm out, I amnot able or willing to continue
to service those patients at therates that you're asking me to.
(04:04):
You know kind of be paid for.
Speaker 1 (04:07):
So I mean, we've talked an awful lot on the
podcast recently about cash payand you know that seems to be
more attractive to a lot of docs.
For that very reason They've,you know, the how low can you go
?
Question.
I guess some of them have hitbottom.
So let's talk a little bitabout traditional networks.
What were the challenges, whatwere the problems, other than
(04:28):
the fact that obviously we'vedriven down cost to the bottom?
What were the challenges andwhat were the problems of
traditional networks?
Speaker 3 (04:41):
Yeah, I think traditional networks such as the
BUCAs, blues United, cigna andEtna certainly were only looking
at the unit cost and, secondly,they were making no
differentiation in the providersand how well the providers
performed, and so all providerswere equal as long as they were
(05:01):
on a roster that was part ofthat organization that they were
contracting with, and so that,as a member, we had no insights
as to whether Dr Joe or Dr Susiewas better than one or the
other for my particulartreatment and that kind of
belies.
Speaker 1 (05:13):
another question which is okay, the initial cost
is X, but if you go to a doctorwho's not as proficient as maybe
another doctor is or anotherprovider is, you have
post-surgical infections, youhave readmit rates, you have all
that kind of stuff.
So is it the case withtraditional networks that
sometimes the cheapest isn't thecheapest, 100% correct?
Speaker 3 (05:34):
Yeah, Many times, if you look at the total cost of
care, those things that you justspoke about readmissions and or
the place of service that thoseservices are rendered, about
readmissions and or the place ofservice that those services are
rendered, ie hospitals versus,or just you know hurt other
facilities, whether they're onlythe brand name pharmaceuticals,
the amount of the utilizationof radiology and is there waste
(05:58):
and other you know proceduresthat that particular doctor uses
, has all sorts of consequencesin the total cost of care.
And so cheap at the unit costlevel does not actually mean
better value and or, ultimately,lower total cost of care.
So plans have been chasingghosts.
(06:19):
I think they have beenone-dimensionally chasing what
they believe is the lowestdollar and then at the end of
the day, when you add up all ofthe other procedures that are
provided to a patient and theircare path, it turns out to be
(06:39):
more expensive.
I talked to a gentleman justrecently and he said, Scott, we
could save $15 on a unit costcharge but end up incurring
another $100,000 in additionalservices that were either
unnecessary or were poorperformance in the services that
the doctor provided.
So you have to be, as aconsumer, more in tune with the
(07:03):
entire spectrum of what is beingrendered by the provider.
Speaker 1 (07:08):
Is that what nationally curated
high-performance networks do?
Speaker 3 (07:13):
Well, there's an interesting question.
What I've uncovered in myprocess here is that what is
known as high-performancenetworks largely means a narrow
network, meaning once againthey're after the unit cost
discount, and they're achievingthat by limiting the provider
(07:33):
organizations that a patient cansee Clearly I'll use Dallas as
an example.
One HPN only has Baylor ScottWhite and their facilities and
doctors as the in-networkprovider.
They've excluded all the othermarket providers that now become
out-of-network.
So the member is forced, ifthey're going to be an
(07:54):
in-network and have the betterat least cost, they're forced to
go to the Baylor Scott White.
And so we're changing what wethink is high-performing
networks with low-growth network.
Speaker 1 (08:06):
Well and beyond those folks who have just summarily
said we're only going to allowthis particular group of
physicians and providers.
Markets have changed.
There used to be.
I remember years ago I wasworking for a division of
Medical Mutual of Ohio and inCleveland there were at the time
I don't know seven or eightmajor health systems, and today
(08:26):
I think there's two.
So the menu has gotten smallerand there's less choice.
To start with, is that part ofthe problem that you're trying
to solve?
Speaker 3 (08:46):
insured employers.
They're finding that theabrasion of forcing a member to
make a change with whom theyhave been seeing as a provider
is coming up with greaterresistance, and it is something
that you know.
Giving choice is important tohave what we would call a broad
network as opposed to the narrownetwork and therefore,
depending on your location andthe type of service of treatment
(09:09):
you're seeking, we want to makesure that members have choice
and have information to makebetter choices.
Speaker 1 (09:16):
Well, I mean even years ago, when I was running a
TPA, we did disruption analysisbut it was largely the C-suite
people who were the onesstroking the checks.
It wasn't necessarily for themembers.
Are members now part of thatcadre where they don't want the
friction and their plans don'twant it for them?
Speaker 3 (09:34):
I'd say the answer is yes, that the members are
really faced with some difficultchoices and are not equipped
with all the information.
And you mentioned thedisruption file.
Again, you're going at unitcost, You're going at what's the
cheapest that I can get thoseservices.
Speaker 1 (09:54):
So when you set out to start building a nationally
curated, high-performance PPOnetwork and you're including
quality metrics and whatnot, howdo you go about doing that?
What's that like?
Because it's a differentprocess, I suspect, than just
finding doctors and getting themto sign up for XYZ price.
Speaker 3 (10:12):
Yeah, that's correct.
We have built a nationalnetwork out of the gates based
on competitive contracting sothat the unit cost is on par
with the other BUCAs.
However, what we're bringing isquality and outcome data at the
individual provider, npi, andwe have accumulated over 50
(10:37):
billion claims from a variety ofsources, which includes the
Medicare, medicaid and 20different commercial data sets.
We have over 300 millionanonymized patient records that
we've been able to look at andseveral million of the providers
, and then we have scored thoseproviders to come up with an
(11:01):
overall score and then alsoscores on their effectiveness,
on their cost andappropriateness.
So those three big dimensionsare what produces an overall
quality score for an individualprovider compared to their peers
in their particular area.
Speaker 1 (11:26):
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And now back to ourconversation From a plan
perspective, when you're goingand having a conversation or a
(13:12):
broker is going and having aconversation with an employer.
What's that conversation like?
What are they pitching thatthey weren't pitching before?
Speaker 3 (13:20):
Yeah, I think what we're pitching and the TPA or
broker's pitching is that thelow-growth network is going to
bring a better choice, forinformation to be transparent so
that a member can be informedon which providers they should
be choosing for their particulartreatment.
(13:43):
The second piece is it willyield about a 30% average
improvement in cost while alsodelivering better quality and
outcomes for the patient andtherefore the plan.
Everybody wins.
Speaker 1 (13:57):
It sounds like it's an easy decision from a
fiduciary perspective.
Yes, what does it look likefrom a member's perspective?
How do you message that tomembers when all of a sudden,
they hear the dreaded words newnetwork?
Speaker 3 (14:08):
Sure, well, I think there are a couple of things
that go into that.
One, we've been careful to haveboth our provider directory
have that information on usingthe traditional stars, but we
also include the stars relatingto those other dimensions of
appropriateness, effectivenessand cost.
And then, secondly, we includethis summary.
(14:31):
We've used some AI technologyfor the LLM is what they call it
to summarize those 300 metricson a given provider into a
simple-to-read paragraph thatallows a member to better
understand why is Dr Joe indeeda high-quality doctor for this
particular carrier suiting?
And so they'll have theinformation at their fingertips.
(14:53):
Secondly, it will be involvedand embedded in various apps,
applications, the mobile apps,so that a member can have it
conveniently where they go tolook for their plan decisions.
And third, any kind of carenavigator or coordinator will
also be equipped with this dataand helping to guide a member in
(15:14):
making those choices.
Speaker 1 (15:16):
What does the employee education component of
this look like?
Speaker 3 (15:20):
Well, I think it's to share about the importance of
you now can find the quality andoutcome information at your
fingertips.
We know that 75% of patients goto Google to search for their
provider and all they're gettingis the anecdotal reviews and
maybe there's some sort of stars, but it's not based on any
(15:43):
clinical data or performancedata.
But now we are educated andsaying this data is now
available, no different than ifyou're going to go buy a car or
a refrigerator, so that you canmake a better informed choice,
why Dr A is better than Dr B.
Speaker 1 (15:57):
But I mean, it is different than buying a car in
one respect and I wonder if youcome across this challenge and
if you do, how you solve it orhow the TPAs and brokers who
work with you solve it.
And that is that if I go outand I drop the money for a
Lamborghini, I'm getting a verydifferent beast than I am if I'm
getting a Toyota Corolla.
In medical care it's often areally inverse relationship that
(16:20):
a lot of times you'll find morequality at a lower cost point.
Does that freak people out anddo we have to educate folks
about that?
Speaker 3 (16:27):
I think we do, and you're absolutely correct.
The studies that we have comeacross and support what you just
said, that high quality doesnot necessarily equal high cost,
quality does not necessarilyequal high cost.
In fact, the inverse is foundthat you can get a knee
replacement with a high quality,some of the best performing
(16:47):
docs, and they are the lowestcost.
Why?
Because they eliminate theunnecessary procedures.
They are not going directly tothe most expensive procedure
when they could have othertreatment paths and their place
of service could be differentthan the most expensive place of
surgery, for example.
And so you know we can findcountless examples where you
(17:10):
know, in healthcare you know thebest providers are not the most
expensive.
Speaker 1 (17:16):
You know part of the reason that I raised the
question is you know, we everyin a while we'll touch base with
our friend Keith Smith out atthe Oklahoma Surgery Center and
he's been doing this kind ofstuff for a long time.
I guess they're the closestequivalent in recent times to a
specialty facility and he'sstill fighting the battle and
they're still having thoseconversations Even I mean, he's
(17:37):
been at it 15 years or maybeeven longer.
Does it take a while for thisto kind of sink in with folks?
Speaker 3 (17:45):
I think it has been an education process for this to
become more commonly understood, but there's momentum today
that this is indeed becomingbetter available to understand.
There are more companies thatare seeking to similar value
props and then some of theconsulting firms the Mercer's
and the Willis-Towers-Watson'shave published some great
(18:14):
studies that show the importanceof quality and the benefits,
whether it be related to theirCOE decisions, centers of
excellence or whether it be someof these other specialty
network folks that we know inthe industry.
But, contrasting that, we'rebringing something similar in
the sense of the value prop ofhigh quality and lower cost, but
we're bringing it across theentire spectrum of care, not
just a few procedure types orcondition types.
(18:34):
It's also interesting I touchedon this earlier but there's a
(18:54):
lot of with all these lawsuitsthat are floating around now
there's a lot of focus onfiduciary duties and plan
committees and whatnot and atcost and you have omitting kind
of the better value choice.
It's your responsibility reallyto look at how do we drive
overall total value, which istotal cost of care and better
outcomes for my members that aremy ultimate stakeholders in the
(19:18):
plan.
Speaker 1 (19:19):
Now, is this a play for self-funded plans only or
for TPAs self-funded plans?
I mean, where do you guys fit?
Speaker 3 (19:27):
We're addressing the TPA market here in 2025.
And we have a number of TPAsthat have started their
contracting process to bring ourproduct to market for this
particular benefit year forenrollment in fall of 25.
But in parallel, we have about600 of the Fortune 1000 benefit
(19:48):
leaders that we've been incommunication with over our
years and they're very excitedabout having an alternative to
the traditional PPO choices thatthey have been using year over
year.
Speaker 1 (19:58):
Is this kind of not getting into too much of your
business model?
But is this kind of a rentalnetwork, kind of it's a PEPM or
some kind of digestible way topay for this?
Speaker 3 (20:08):
It is definitely.
It's a PEPM, which is thecommon way for these primary
networks to be contracted, andwe've priced it in a manner that
is below the Bucca PEPM, so youget more value, You're going to
get a lower cost out of thegates and you're going to have
the quality built into thenetwork, so you'll accrue the
benefit of the additionalreduction in total cost of care.
(20:31):
And we're not going toparticipate in the shared
savings scheme that some of theother organizations do, because
it's too difficult to combat andattribute who created what
dollars of savings.
And you know, can I have my 50percent please?
So we just want to charge afair PEPM and deliver greater
value.
Speaker 1 (20:50):
Yeah, I mean that also creates some other
challenges that we're all awareof.
So I can certainly understandthat.
Where do you see this growing?
I can certainly understand that.
Where do you see this growing?
I mean, one of the things thatI asked you before we came
online was are you national?
Because I remember years ago,back in my TPA days, we'd go and
(21:10):
talk to networks and theyweren't national and we had
national clients and you know,we were more of a Taft-Hartley
shop so we had folks all overthe place between where they
were located, where the localswere, and travelers.
Are you a national network anddo you have coverage every place
?
Speaker 3 (21:27):
We are a national network so, out of the gates, we
have built out a nationalfootprint that can service the
50 states.
Some markets will be more denseand have more coverage, others
we are continuing to build outand optimize, but we do have the
ability to service clients andtheir groups throughout the 50
(21:49):
states.
Speaker 1 (21:51):
Beyond the quality issues, which you know certainly
, I think most employers arestill somewhat paternalistic and
want to make sure that theiremployees have the best possible
care and get well sooner, bothfor the employees and for the
employer's own selfish reasons.
I guess the question is whatkind of a delta might somebody
(22:12):
expect in price and over whatperiod of time?
When will they start seeingdifferentials that they can
actually quantify?
Speaker 3 (22:27):
Usually in the first year, or you complete the first
year and again industry showsthat one CFO reported that he
saw his renewal rates drop froma 40% the prior year to zero and
that his medical loss ratiowent from 120 down to 40, and
that he had 80% of hisparticipants his members
participate in choosinghigh-quality providers, so
(22:48):
there's immediate financialbenefit to the plan as well as
the benefits to the member,because often the plan design
that most TPA are bringing isthat they'll waive the member
costs, out-of-pocket costs bychoosing one of these
high-quality providers.
But all the while, in our model, if you still have a long-term
(23:10):
provider that you're comfortablewith and they're not the
high-quality, we're includingthat person in our network.
So it may have a plan designthat has some member
responsibility for that provider.
But overall we went and sentmembers to make better informed
choices.
Speaker 1 (23:26):
Where do you see this going in the next three to five
years?
Speaker 3 (23:29):
Yeah, our goal is to be a complete BUCA alternative
that's independent and so thatwe will be head to head with the
major insurers and ASOs, sothat people will have a choice
that they can say gee, logroNetwork is national, it has all
the different provider typesthat my members need and also
(23:51):
can provide the better value,and so we're a David and Goliath
story that's in the making.
Speaker 1 (23:59):
Well, and I love David's stories, so I'm right
there with you.
That's a great place to end ourconversation for today.
Scott Smith, founder and CEO ofLogro Network.
Scott, thanks for sharing yourexpertise with us.
Speaker 3 (24:09):
You're most welcome.
Thank you, David.
Speaker 1 (24:17):
I want to give a quick shout out 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 him at hatchermedianet.
That's H-A-T-C-H-E-R medianet.
Speaker 2 (24:35):
This Shift Shapers podcast is copyrighted content
and may not be reproduced inwhole or in part without the
express written permission of.
Shift Shapers podcast iscopyrighted content and may not
be reproduced in whole or inpart without the express written
permission of Shift ShapersSolutions LLC.
Copyright 2024.
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