October 29, 2025 • 27 mins
What does it take to overcome life’s toughest obstacles and build a successful business? Thomas J. Knox, Chairman and CEO of Pinpoint Health Benefits, shares an entrepreneurial journey that’s a true testament to perseverance, lifelong learning, and seizing opportunities in the face of adversity.
Tom’s story begins in public housing, where he sold newspapers, caddied, and started working from a young age. After serving in the U.S. Navy, Tom entered the insurance industry, starting with small, door-to-door sales of basic life insurance policies. His commitment to self-improvement and relentless work ethic catapulted him to build businesses from the ground up, including Homestead Smart Health Plans and Pinpoint Health Benefits.
One of Tom’s core business philosophies is the importance of innovation and adaptability. His ventures, such as Pinpoint Health Benefits, focus on providing small businesses with affordable, high-quality health insurance plans, proving that even in the face of large competitors, there’s always room for creative solutions.
Key Takeaways:
- From Humble Beginnings to Entrepreneurial Success: Tom's early experiences shaped his strong work ethic and entrepreneurial spirit.
- Learning and Growth: Despite a limited formal education, Tom’s commitment to reading and self-education helped him excel in his industry.
- Building a Business with Innovation: Tom revolutionized the health insurance market by offering affordable, competitive plans with added benefits.
- Leadership in Politics and Business: As Deputy Mayor of Philadelphia, Tom helped balance the city’s budget, showing his ability to lead both in business and government.
About Thomas J. Knox, PHD, CLU, ChFC, FCPP:
Tom Knox is a successful entrepreneur and insurance industry professional. In addition to being the Chairman and CEO of Pinpoint Health Benefits, Mr. Knox is the Founder of Homestead Smart Health Plans and the current Chairman of Homestead Insurance Company. As CEO of UnitedHealthcare from 2004 to 2006, Mr. Knox was responsible for overseeing all of UnitedHealthcare's operations in Pennsylvania and the surrounding jurisdictions.
Connect:
Website pinpointhealthbenefits.com
LinkedIn linkedin.com/in/tomknoxphilly/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Announcer (00:01):
The following programming is sponsored by Marc
J Bernstein.
The views expressed do notnecessarily reflect the views of
this station, its management orBeasley Media Group.
Entrepreneur, founder, authorand financial advisor, Marc
Bernstein helps high-performingbusiness owners turn their
visions into reality.
Through his innovative work andthe Forward Focus Forums, Marc
(00:22):
connects entrepreneurs toresources that fuel their
success.
Founders Forum is a radio showand podcast where entrepreneurs
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the stories behind their success.
Join Marc and his guests for amix of inspiration, valuable
insights and a little fun.
Now let's dive in.
Marc Bernstein (00:42):
Good morning America.
How are you?
It's a sunny day inPhiladelphia.
It's a hot day in Philadelphia,we're into the dog days of
summer and we usually have athought of the day.
We're going to skip that todaybecause we could spend three
hours with our guest today andnot cover it all.
So we're going to get rightinto it, cover it all.
(01:05):
So we're going to get rightinto it, and I'm going to tell
you that our guest today isThomas J.
Knox, PHD, CLU, ChFC, FCPP.
He's chairman and CEO ofPinpoint Health Benefits, and
Tom is a serial successfulentrepreneur and insurance
industry professional.
So, in addition to beingchairman and CEO of Pinpoint, he
is the founder of HomesteadSmart Health Plans and the
(01:27):
current chairman of HomesteadInsurance Company.
And as CEO of United Healthcarefrom 2004 through 2006, Mr.
Knox was responsible foroverseeing all of United
Healthcare's operations inPennsylvania and surrounding
jurisdiction.
In addition, I might add andhopefully we'll have a few
minutes to get into this heworked in the Ed Rendell mayoral
(01:51):
administration of Philadelphiaand he was I'll just say he was
sort of the Elon Musk of his day.
He did it long before he didand did it better, I might add
and he also ran for mayor,ultimately, of Pennsylvania and
almost won Mayor of Philadelphia, I'm sorry and also governor of
Pennsylvania and almost won.
(02:11):
And he is fascinating guy witha lot of great, rich background.
And, tom, welcome, thank you,great to have you here this
morning.
So, and also, may I tell them,because you just started another
company, may I tell them yourage?
Is that okay?
Sure, so Tom recently turned 84.
He was 83 when we startedtalking about this a few months
ago and he's still at it andwith a lot of them and vigor.
(02:35):
So one of my mentors in thatregard.
We met at the Union League ofPhiladelphia and I'm hoping to
get to know him better becausethat's where I want to be, that
and beyond.
You know, stay active and keepcreating and all that.
So let's start in the verybeginning, tom, as you told me
when we were talking over adrink one evening about your
humble beginnings and that youworked from a very young age and
(02:59):
pretty much were working anddoing entrepreneurial things up
until joining the Navy.
So let's talk about that.
Thomas J. Knox, PHD, CLU, (03:06):
Well , I grew up in public housing
and it was the AbbotsfordProject that went Abbotsford and
Henry Avenues.
So lived there until I wasabout 14.
And then my mother and fathermoved down to Midville and Ridge
next to a taproom.
My father liked getting placesnext to a taproom.
(03:29):
We stayed there a year and hemoved to another place on Scotts
Lane next to a taproom.
Then I went into the Navy.
I was 16 when I went into theNavy.
My mother was able to take theone and make it a zero.
So when I shared my bursarticket it said I was 17.
Wow, spent four years in the USNavy on an aircraft carrier
(03:49):
called the Intrepid for two anda half years and a year and a
half on the Wasp, anotheraircraft carrier.
And if you want to know what Idid on that ship at the end of
my career on the ships, I was.
If you never see these guys inyellow shirts waving their hands
and telling planes to go thisway or that way, that's what I
was doing, that's what you'redoing.
Marc Bernstein (04:10):
So prior to that , before going into the Navy,
you were entrepreneurial fromday one.
I know you sold and deliverednewspapers.
Oh yeah, you caddied.
Thomas J. Knox, PHD, CLU, ChF (04:20):
I was serving papers.
I was doing 500 and some papersa day.
I did the Olden Park Manor.
They had two buildings and Idid all the papers in there in
the morning and all the papersserved the bulletin in the Daily
News in the afternoon.
I had a route that was down onWissican Avenue near what the
(04:43):
heck was the name of that otherstreet.
I forget right now.
In any event, then the MidvaleHappenstall had their gate there
where all the men come out, andtheir office building was
across the street.
So I served papers in theoffice building and I sold them
at the gate and at the end ofthe day it was over.
You know it was like 550 papers.
(05:04):
That's a lot.
Marc Bernstein (05:05):
And.
Thomas J. Knox, PHD, CLU, ChF (05:06):
I didn't have to do anything on
Saturday, except I caddied up atWalnut Lane.
Marc Bernstein (05:10):
And then on Sunday I was there.
That's not the easiest work inthe world.
I did it too, I know.
Thomas J. Knox, PHD, CLU, (05:15):
Well , you make $2 for carrying a bag
around at the time.
At the time, yeah, now theywent $100.
Right, right, at least yeah,100.
Right, right, at least, yeah.
Well, it was a poor golf course.
Marc Bernstein (05:25):
Right, I understand it was a public golf
course.
I know I used to play there asa kid.
Walnut Lean.
Thomas J. Knox, PHD, CLU, C (05:30):
And then on Sunday I sold them in
front of the church St Bridget's.
Marc Bernstein (05:33):
Church, so pretty much you were working
seven days a week.
I was trying to.
So what?
I'm going to ask you this atthe beginning.
I would usually ask this at theend but what do you think?
Where did you get yourentrepreneurial spirit from?
Thomas J. Knox, PHD, CLU, (05:48):
When you're growing up poor, you
don't want to do it again.
It was necessity, right?
Yeah Well, I had three youngerbrothers.
None of them were verysuccessful.
The one that was next in lineto me had a fish business and he
was pretty successful, but atthe end he let one of his
clients, seafood Chien.
He get a $300,000 tab and thenthey went bankrupt and that put
(06:12):
him out of business.
Marc Bernstein (06:16):
But so what?
Where were you different thanyour other siblings?
That made you successful, doyou think?
Thomas J. Knox, PHD, CLU, C (06:22):
You know it's hard to say that they
just weren't theentrepreneurial type you
successful, do you think?
You know it's hard to say thatthey just weren't the
entrepreneurial type?
Marc Bernstein (06:31):
You know, and it's a desire, so you were.
It came with the package withyou.
Thomas J. Knox, PHD, CLU, (06:36):
Well , I was always very prolific in
my reading.
You know, you only go to the10th grade and you wind up in
2010 with a PhD.
Right, you had to do somereading, yeah, and I was a
prolific reader.
Ah, okay, I knew the tax codebetter than the two tax
attorneys that worked for me,and both of them had their
masters in tax.
Marc Bernstein (06:57):
Right, we were jumping ahead to when you got in
the financial services industry, I know, but yes, are you still
a prolific reader?
Thomas J. Knox, PHD, CLU, ChF (07:05):
I still am.
I mean, I must read six hoursevery day, at least six hours a
day, do you really that's?
Marc Bernstein (07:11):
great, that's really remarkable.
So after you got out of theNavy, is that when you went into
the life insurance business,well, you had to wait until you
were 21 to get in the lifeinsurance business.
Thomas J. Knox, PHD, CLU, Ch (07:23):
So first I was selling great books
of the Western world, so I hadto buy a set of them and they
sold them to me for very littlemoney, Like the encyclopedia
guys.
Marc Bernstein (07:33):
Yeah, same thing .
Thomas J. Knox, PHD, CLU, C (07:35):
But there's like 50 of them, so I
still have the ones I bought in1962,.
Announcer (07:42):
I guess it was.
Thomas J. Knox, PHD, CLU, ChF (07:43):
I still have every one of those
books Now.
A couple of them I've read, butmost of them great books of the
Western world.
I still have about 40-some togo.
Marc Bernstein (07:53):
I don't know if I told you, but I sold cookware
to get myself through collegehigh quality cookware, you know.
Same idea, same sales methods,all that.
There's a company calledAmerican Future Systems, the
creator of that.
I don't know if you've run intohim.
Ed Sattel is a big Philadelphiaphilanthropist now Sattel
Institute I'll have to introduceyou to.
Ed.
Sattel is a big Philadelphiaphilanthropist now.
No, I never met him.
Sattel Institute I'll have tointroduce you to the Sattel
(08:15):
Institute.
I'll tell you that offhand.
Thomas J. Knox, PHD, CLU, (08:17):
Well , my son is one of those.
He sold cutlery yeah, verysimilar For about a year.
We still have Cutco, cutcoCutco is what it was.
Yeah, and I still have everyknife and fork and butcher knife
that he sold me and they'restill working good and that was
like 30 years ago I shouldn'tsay this on the radio.
Marc Bernstein (08:37):
My cookware was fine too, but my wife threw it
away.
She didn't like it.
She was used to a certain kindof cookware, but it was good.
It was guaranteed not to stain,pit, tarnish, rust, warp, chip,
crack, bend or break for life.
It was great stuff, but wedon't still have it,
unfortunately.
It was called Wonderware.
Thomas J. Knox, PHD, CLU, Ch (08:56):
My wife wouldn't throw it away
because my son sold it to us.
That's right.
Marc Bernstein (09:01):
Right, right, it would be different.
My mother wouldn't have thrownit away.
My wife threw it away, anyway,so you got in the insurance
business.
Thomas J. Knox, PHD, CLU, (09:10):
Well , I started in the insurance
business on a debit.
Now most people don't know whata debit is Right, but back in
the 60s a debit was when youwent door to door collecting
nickels, dimes and quarters forpolicies that had a death
benefit of anywhere between $100and $1,000.
Maximum death benefit $1,000.
And I was going around down inRittner Street all the way down
(09:35):
to Oregon.
You know Rittner Street down toOregon Avenue, from Broad
Street up to 23rd Street andwhat company was that for
Metropolitan?
Marc Bernstein (09:44):
I thought I was going to say I thought it was
MetLife Metropolitan.
Thomas J. Knox, PHD, CLU, (09:46):
Life it's called it.
I was their best just startingin the business.
In 19 weeks they have the firstquarter is 19 weeks I sold 93
policies to the people on mydebit.
Wow, and the manager in theoffice says that was more than
the other 14 guys did together.
So we're taking you out of thatbusiness and putting you into
strictly sales.
So I've done very well sellinglife insurance.
(10:10):
I mean, your numbers arephenomenal.
Well, back in the 80s like in83, 4, 5, and 6, I sold over a
billion dollars worth of cashvalue life insurance.
Marc Bernstein (10:23):
Yeah, they weren't $1,000 death benefits
anymore.
Thomas J. Knox, PHD, CLU, Ch (10:25):
No , now they're million dollar
death benefits and people alwayswant to know how I did that.
Well, it was marketing, and Ithink I was always really the
best marketer.
There was only one guy that wasa better marketer than me.
His name was Alan Shine.
He turned out to be his wifegot rid of him because he was
(10:47):
scrutinizing with other women.
Now I've been married to thesame one for 50 years, so I
don't do that stuff, but he did.
Marc Bernstein (10:54):
Gotcha, but in death benefit I know you sold
billions of dollars yeah.
Thomas J. Knox, PHD, CLU, (11:03):
These policies were over a billion
dollars cash value lifeinsurance.
My commissions were $9 milliona year, million dollars a year.
But you know, I remember that Isent my qualifications in to
get admitted to what they callthe top of the table.
Now, in order to be at the topof the table back in the 80s you
(11:24):
had to do 12 million ofinsurance cash value.
If you were just a milliondollar round table, you had to
do 2.3 million.
I was doing a billion.
I called so the guy I sent myqualifications and the guy
that's running the program callsme up.
He says, mr Knox, you got toomany zeros on this thing.
Nobody can sell that muchinsurance.
I said, oh, I did.
He said no, you didn't.
(11:45):
He says you're companies in theUnited States and there's 870
of them.
Marc Bernstein (11:57):
They don't and most of them don't sell a
billion dollars.
You're going to have to getmore proof.
You told me a story beforeabout the.
Thomas J. Knox, PHD, CLU, C (12:02):
You were in the wrong line to
accept an award.
Oh, that one, yeah, I was with.
I was a leading agent forEquitable in 77, 78, 79, 80.
Marc Bernstein (12:09):
Unbelievable, yeah.
And what happened when theytold you?
It was a funny story when youwere in the wrong line.
Thomas J. Knox, PHD, CLU, Ch (12:13):
Oh yeah, well, that one.
So I had started with Equitablein 97, or, excuse me, 79.
And I had only been with themfor about four months.
And in order to get this awardyou had to earn $100,000 in
(12:34):
commissions.
And Ecuador had 2,500 people attheir annual outing that they
have for four days.
So they have you coming up inthree different lines to get
these awards.
So I'm in the line to get thisaward where you get a sword and
a.
I forget what they called thataward, but the Excalibur Award,
(12:58):
that was what it was.
So I'm in the line and I'mtalking to this guy in front of
me and he says who do you workfor?
I said Cabar, blah, blah, blah.
He says how long have you beenin the business?
I said well, I started withEquitable four months ago.
He said holy shit, you're inthe wrong line.
Announcer (13:17):
Nobody could earn $100,000 in three months.
Marc Bernstein (13:20):
They couldn't believe you did those numbers.
I was always very good atselling, so I want to point out
you were a lot more than asalesman, though.
You're an entrepreneur, becauseyou built an organization.
I know you were sellingcorporate insurance.
You were selling life insuranceto companies.
Thomas J. Knox, PHD, CLU, (13:36):
Well , I was selling non-qualified
deferred compensation plans andthat's how Carb.
Well, I was sellingnon-qualified deferred
compensation plans and that'show Carbarth and I'm looking up
in that building over there ithas their name on top of it
Carbarth and I saw I got GeorgeCarr and Bob Barth wanted me to
come to work because I had aprogram that I developed to
present non-qualified deferredcompensation plans and they
(13:57):
wanted the program Right.
Marc Bernstein (13:59):
So you taught them how to do it, because
George Carr became a bigproducer.
Oh, yeah, Well.
Thomas J. Knox, PHD, CLU (14:03):
George Carr.
He was never a big producer,but he had a big agency, Right
right.
He didn't sell much himself,and neither did Bob.
Bob actually went to the homeoffice, Home office.
He became the CEO.
No, he never became CEO, but hecame in a very high, maybe even
executive vice president.
Marc Bernstein (14:20):
Oh, I thought he was president, but he died
before he got there.
Thomas J. Knox, PHD, CLU, Ch (14:24):
Oh really, yeah, bob died.
Young George is still alive.
I think he must be about 90 now.
Marc Bernstein (14:29):
So, anyway.
So you broke all kinds ofrecords doing that.
Yep.
Then what happened?
Oh, you know what.
Then what happened is oh, youknow what.
Then what happened is.
Thomas J. Knox, PHD, CLU, (14:37):
Well , I'm going to tell you how I
sold all that insurance, becausepeople don't understand it.
Marc Bernstein (14:41):
Well, I was going to say one.
We've got to take a quickcommercial break, so we're going
to get right into that rightafter we come back.
Okay, good, we'll be right backon Founders Forum.
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Visit GLASAorg.
We're back on Founders Forumwith our guest today, Mr Tom
Knox.
He had a very distinguishedcareer in the financial services
industry and has done very muchsince then.
So, Tom, in the interest oftime, I know that you did very
well in the business and thenyou ended up selling out of the
life insurance business, thebusiness and then you ended up
(16:18):
selling out of the lifeinsurance business.
Thomas J. Knox, PHD, CLU, (16:20):
Yeah , I sold my life insurance
business on December 23rd of1986 when the new tax law went
into effect January 1st of 87.
Right.
Marc Bernstein (16:28):
And then I know, then you got into the, so you
got out just in time.
Thomas J. Knox, PHD, CLU, (16:32):
Well , I retired, but after three
months my wife kicked me out ofthe house.
She said you're bothering me,the kids are not happy, the
dog's getting mad.
Right, buy yourself a job.
Marc Bernstein (16:46):
Right, so that was almost 40 years ago that you
retired basically.
Thomas J. Knox, PHD, CLU, C (16:49):
And I bought a lot of different
companies.
I bought a bank Right, I didthat one.
Crusader Bank was the secondlargest savings bank in
Philadelphia.
I bought a distillery and awinery.
We were selling Chateau Luzernein my wines A million cases a
year.
A million, 200,000 cases a yearin Pennsylvania.
You didn't buy a tap room, didyou?
(17:09):
No, none of your father.
No, my wife doesn't like thatbusiness.
By the way, I understand I didhave a couple of restaurants.
They're the only business thatI ever bought or got into that I
made money on.
Are those two restaurants?
Those are hard.
Which ones did you own?
I owned La Terrasse.
Oh, yeah, yeah, that was a bigdeal in the 90s and so forth,
and then I sold it to Tony.
(17:30):
What's his?
Marc Bernstein (17:33):
last name.
Now I forget right Any lessonslearned from being in the
restaurant business.
Thomas J. Knox, PHD, CLU, (17:37):
Don't get in it, Unless you're going
to be an owner and on site.
Right right, If you're on siteyou can make money.
But what?
Works out the back door andgoes through the bar is
tremendous.
Marc Bernstein (17:50):
I would learn that watching clients,
especially construction people,that would get into the
restaurant business.
And a number of years ago I wasin a partnership.
We bought a commercial buildingand they said, oh, we've got to
have all this equity, we'regoing to get another business.
And I said what is it?
They said a restaurant.
I said I'm out.
And they said what do you mean?
You're out?
I won't go to the whole story.
Thomas J. Knox, PHD, CLU, (18:13):
Yeah , it was a good choice.
I saw too many of turkey farmsdown in South and North Carolina
.
I had a million and a halfbirds on the ground at one time,
figured out how to get them tomarket sooner, figured out how
to feed them better All oncomputers.
Wow, that was in the late 80s,early 90s.
Did you sell that business?
I sold that business in partsand tripled my money on that
(18:37):
business.
I was in an internationalharvester dealership, a
commensal dealership, amazing Afew others.
I forget the names right now.
Marc Bernstein (18:47):
I'm going to come back to the health
insurance business, butsomewhere in there, what years
did you get into politics?
When was that?
Thomas J. Knox, PHD, CLU, (18:54):
Well , I became deputy mayor in 92.
I was Ed Rendell's largestfundraiser and his biggest
contributor.
Yeah, I lent him $50,000 onDecember 26th of 91, or 90, was
it 90,?
So that he'd have a war chestof a million dollars, and he
(19:14):
paid me back eventually.
It took him 15 years.
Marc Bernstein (19:18):
And then I mentioned, you became like the
Elon Musk of the Rendelladministration.
Thomas J. Knox, PHD, CLU, (19:21):
Well , he, made me deputy mayor in
charge of management andproductivity and at the time we
had a quarter of a billiondollar deficit on a $2.2 billion
budget and we had that runningfor three years.
The state was going to take usover.
He wanted me to clear it up andI did that and to tell you the
truth, that was a lot of funbecause if I could spend an hour
(19:42):
here telling you all the funnystories about people then what
we had to get them to do.
I remember when I was talkingto Kumar Kirshenhand, who was
the water commissioner.
We were trying to get all sixfleets together because they
were having a lot of Nobody everhad all their vehicles were
down because they didn't haveaccess to the other warehouses.
I went in to see him and he saidwe're not doing that.
(20:04):
He said I'd rather resign thando that.
I said here's a yellow pad,write it out.
I'll take it to the mayortomorrow.
He said well, what do you mean?
He finally signed the pay.
So I never we commit and now'reable.
We had 25% of the police carswere out any one time.
We reduced that down to 8% ofthe police cars because they had
access to the other five otherauto parts places.
Marc Bernstein (20:29):
You.
I know he wanted to pay you asalary for that position and you
wouldn't take it right.
Thomas J. Knox, PHD, CLU, (20:34):
Well , you know when you're going to
go in and start cutting people'ssalaries or their holidays, you
know we didn't cut their healthinsurance benefits.
When you're going to go in andstart cutting people's salaries,
their holidays we didn't cuttheir health insurance benefits,
but we cut the cost of theirhealth insurance benefits.
It was a big deal to cut thatthey still don't like me for
that.
Marc Bernstein (20:52):
Well, I remember that was a big deal back then
that you were able to do allthat cost cutting and turn a
surplus for the city.
Yeah, and I made them go intodifferent types of plans.
Thomas J. Knox, PHD, CLU, (21:00):
They had these big signs.
They were walking around CityHall with my picture and another
guy's picture.
I forget his last name, alan'slast name.
But do you want these men to bepicking at your gynecologist?
Is what the sign said.
Oh God, in my picture andAlan's was on it.
But I eventually got into thehealth insurance business and
that's where I've been for thepast 25 years, basically.
Marc Bernstein (21:24):
And did you enter as CEO of UnitedHealthcare
?
You were in it before that,obviously.
Thomas J. Knox, PHD, CLU, (21:29):
Well , I bought my own insurance
company in 99.
Okay, it called FidelityInsurance Group Right, and I
took it from a company that had$8.5 million of revenue and 10
employees to a company that had$70-some million of revenue and
280 employees.
And I had built up a very bignetwork in Pennsylvania not in
(21:53):
Pennsylvania five-county areawhich UnitedHealthcare liked.
I was about to sell my companyto Oxford and he called me up.
He said I want you to talk tothese people at UnitedHealthcare
.
I said well, ed, I'm talking toOxford and they're giving me a
good price.
He said I don't care whatthey're giving you, you owe me.
I was the one that got you intothat business with all those
(22:15):
hospitals.
I said you're right, I'll waitand talk to them.
So the first time he came outhe called me up and he said we
can't do it.
Rendell was talking to the CEOof United Oil.
The CEO was going to the guythat's in charge of acquisitions
.
He was going to one of hisemployees and he calls me and
says tell me about your companyand he says we can't buy your
(22:36):
company, it's too damn.
Tell me about your company andhe says we can't buy your
company, it's too damn, we don'tbuy the companies that are that
small.
I said, well, that's okay,right, and we hung up and I told
him.
Right now, I said this is whathe told me.
I says wait there 10 minutes.
10 minutes later, this guy callsme back.
He says when can I come out?
I said you can come out Monday.
(22:59):
I'm selling it to Oxford onTuesday.
He came out Monday and heoffered me more than twice as
much than Oxford was offering me.
Wow, and the reason was I had anetwork.
The only two companies rightnow that have a really good
network, or three, is Blue Cross, Aetna and UnitedHealthcare.
And UnitedHealthcare wasgetting a $20 or 20% discount,
(23:23):
blue Cross was getting 74%discount, aetna was getting 70%
discount, I was getting 68%discount, so they went from 20%
to 68%.
Wow, and they never soldanything in Pennsylvania.
But 60% of the Fortune 500companies were clients of
UnitedHealthcare, so they had144,000 people in our area.
(23:48):
Right, yeah, they saved $250million a year for their clients
Because of that acquisitionyeah, unbelievable, but in any
event, one of the parts of mycompensation package which is, I
mean, this is the first timeanybody ever was paying me a
half a million dollars a year,and that's in 2004.
Announcer (24:08):
Way back.
That's like a million and a halftoday.
Yeah, yeah.
Thomas J. Knox, PHD, CLU, C (24:11):
But the amount of money they paid
me was ridiculous and they gaveme a lot of stock options and
when they left me go they gaveme a bonus.
Marc Bernstein (24:20):
that was you know really a big thing You're
talking about.
When you were.
Thomas J. Knox, PHD, CLU, C (24:25):
CEO when I was CEO of.
You know the guy that gotkilled about four months ago.
Yeah, yeah, he had my job.
Marc Bernstein (24:33):
Right, I know that's the job I had.
We talked about it.
I said thank God there wasn'tyour job today.
Thomas J. Knox, PHD, CLU, (24:39):
Well , thank God nobody was shooting
back then either.
Marc Bernstein (24:42):
Right, it's crazy, right, Really interesting
story.
So since then, you're still inthe health insurance business.
So you founded we want to talkabout that.
So you founded, we want to talkabout that.
So you founded Homestead and Ibelieve you sold a majority
interest in that and now youhave a pinpoint health benefits.
You want to talk about that fora minute?
Sure.
Thomas J. Knox, PHD, CLU, (25:02):
Well , homestead is in the large
group business, pinpoint is inthe small group business.
We're selling groups of fivelives to 125 lives and every
time we quote, we're somewherebetween 10% and 15% cheaper than
Blue Cross.
And our partner is PennMedicine and if you go to Penn
(25:23):
Medicine and you have any one ofour plans, they do not charge
you for your deductible or yourcoinsurance, so you basically
can go to Penn Medicine for free.
Now when you tell smallemployers that they can get
their employees no deductible,no co-insurance and their
employees are always complainingabout the deductibles and
(25:44):
co-insurance that's a big dealand especially when it's the
best hospital in the state and15% cheaper.
Sometimes they're 25% and 30%cheaper.
Marc Bernstein (25:54):
It's an amazing value proposition.
Any small businesses listeningbecause we have a lot of
entrepreneurs listening theyshould check out Pinpoint for
benefits, because I don'tusually advertise.
Thomas J. Knox, PHD, CLU, Ch (26:08):
We enrolled our first people on
May 1st and we have a bigenrollment coming up on July 1st
Interesting, so we're doingwell.
But people like the fact thatthey can get independent
medicine and there's nodeductible or co-insurance.
Marc Bernstein (26:22):
I have two quick questions for you, because we
only have believe it or not,about a minute and a half left.
One is looking out three yearsbecause, again, you're still
full of lots of energy and stilldoing a lot of things.
What's your life look likethree years from now, Tom?
Thomas J. Knox, PHD, CLU, (26:37):
Well , I hope.
I'm on a cruise ship in theMediterranean with my wife.
The problem is I have two dogsand she won't leave them and the
cruise ships won't take them.
Marc Bernstein (26:46):
We have that issue too.
It's funny you say it.
I talked my wife into going onan Alaska cruise and leaving the
dog.
We're going to do that.
We have one more minute.
So real quick, tell me realquick.
You've mentioned your wife.
Tell me about your wife, family, kids.
Thomas J. Knox, PHD, CLU, (27:01):
We've been married 50 years now.
We were married 50 years lastmonth and it wasn't a hard thing
.
People say how do you staymarried 50 years?
I say our arguments never lastmore than a minute or two and we
forget about what we werearguing about three minutes
later.
It's amazing.
Marc Bernstein (27:17):
And that's the truth, tom.
We covered a lot of groundtoday.
I really appreciate you beinghere today.
We could have talked for hoursmore, but thanks so much for
being here, mr Tom Knox, andthank you all for listening to
Founders Forum and we'll see youagain next week.
Announcer (27:36):
Go to Pinpoint.
We hope you enjoyed your timewith Founders Forum and that you
found value to take with youthroughout your day.
Join us again next week.
The following programming is sponsored by Marc
J Bernstein.
The views expressed do notnecessarily reflect the views of
this station, its management orBeasley Media Group.
Entrepreneur, founder, authorand financial advisor, Marc
Bernstein helps high-performingbusiness owners turn their
visions into reality.
Through his innovative work andthe Forward Focus Forums, Marc
(00:22):
connects entrepreneurs toresources that fuel their
success.
Founders Forum is a radio showand podcast where entrepreneurs
share their journeys, revealingthe lessons they've learned and
the stories behind their success.
Join Marc and his guests for amix of inspiration, valuable
insights and a little fun.
Now let's dive in.
Marc Bernstein (00:42):
Good morning America.
How are you?
It's a sunny day inPhiladelphia.
It's a hot day in Philadelphia,we're into the dog days of
summer and we usually have athought of the day.
We're going to skip that todaybecause we could spend three
hours with our guest today andnot cover it all.
So we're going to get rightinto it, cover it all.
(01:05):
So we're going to get rightinto it, and I'm going to tell
you that our guest today isThomas J.
Knox, PHD, CLU, ChFC, FCPP.
He's chairman and CEO ofPinpoint Health Benefits, and
Tom is a serial successfulentrepreneur and insurance
industry professional.
So, in addition to beingchairman and CEO of Pinpoint, he
is the founder of HomesteadSmart Health Plans and the
(01:27):
current chairman of HomesteadInsurance Company.
And as CEO of United Healthcarefrom 2004 through 2006, Mr.
Knox was responsible foroverseeing all of United
Healthcare's operations inPennsylvania and surrounding
jurisdiction.
In addition, I might add andhopefully we'll have a few
minutes to get into this heworked in the Ed Rendell mayoral
(01:51):
administration of Philadelphiaand he was I'll just say he was
sort of the Elon Musk of his day.
He did it long before he didand did it better, I might add
and he also ran for mayor,ultimately, of Pennsylvania and
almost won Mayor of Philadelphia, I'm sorry and also governor of
Pennsylvania and almost won.
(02:11):
And he is fascinating guy witha lot of great, rich background.
And, tom, welcome, thank you,great to have you here this
morning.
So, and also, may I tell them,because you just started another
company, may I tell them yourage?
Is that okay?
Sure, so Tom recently turned 84.
He was 83 when we startedtalking about this a few months
ago and he's still at it andwith a lot of them and vigor.
(02:35):
So one of my mentors in thatregard.
We met at the Union League ofPhiladelphia and I'm hoping to
get to know him better becausethat's where I want to be, that
and beyond.
You know, stay active and keepcreating and all that.
So let's start in the verybeginning, tom, as you told me
when we were talking over adrink one evening about your
humble beginnings and that youworked from a very young age and
(02:59):
pretty much were working anddoing entrepreneurial things up
until joining the Navy.
So let's talk about that.
Thomas J. Knox, PHD, CLU, (03:06):
Well , I grew up in public housing
and it was the AbbotsfordProject that went Abbotsford and
Henry Avenues.
So lived there until I wasabout 14.
And then my mother and fathermoved down to Midville and Ridge
next to a taproom.
My father liked getting placesnext to a taproom.
(03:29):
We stayed there a year and hemoved to another place on Scotts
Lane next to a taproom.
Then I went into the Navy.
I was 16 when I went into theNavy.
My mother was able to take theone and make it a zero.
So when I shared my bursarticket it said I was 17.
Wow, spent four years in the USNavy on an aircraft carrier
(03:49):
called the Intrepid for two anda half years and a year and a
half on the Wasp, anotheraircraft carrier.
And if you want to know what Idid on that ship at the end of
my career on the ships, I was.
If you never see these guys inyellow shirts waving their hands
and telling planes to go thisway or that way, that's what I
was doing, that's what you'redoing.
Marc Bernstein (04:10):
So prior to that , before going into the Navy,
you were entrepreneurial fromday one.
I know you sold and deliverednewspapers.
Oh yeah, you caddied.
Thomas J. Knox, PHD, CLU, ChF (04:20):
I was serving papers.
I was doing 500 and some papersa day.
I did the Olden Park Manor.
They had two buildings and Idid all the papers in there in
the morning and all the papersserved the bulletin in the Daily
News in the afternoon.
I had a route that was down onWissican Avenue near what the
(04:43):
heck was the name of that otherstreet.
I forget right now.
In any event, then the MidvaleHappenstall had their gate there
where all the men come out, andtheir office building was
across the street.
So I served papers in theoffice building and I sold them
at the gate and at the end ofthe day it was over.
You know it was like 550 papers.
(05:04):
That's a lot.
Marc Bernstein (05:05):
And.
Thomas J. Knox, PHD, CLU, ChF (05:06):
I didn't have to do anything on
Saturday, except I caddied up atWalnut Lane.
Marc Bernstein (05:10):
And then on Sunday I was there.
That's not the easiest work inthe world.
I did it too, I know.
Thomas J. Knox, PHD, CLU, (05:15):
Well , you make $2 for carrying a bag
around at the time.
At the time, yeah, now theywent $100.
Right, right, at least yeah,100.
Right, right, at least, yeah.
Well, it was a poor golf course.
Marc Bernstein (05:25):
Right, I understand it was a public golf
course.
I know I used to play there asa kid.
Walnut Lean.
Thomas J. Knox, PHD, CLU, C (05:30):
And then on Sunday I sold them in
front of the church St Bridget's.
Marc Bernstein (05:33):
Church, so pretty much you were working
seven days a week.
I was trying to.
So what?
I'm going to ask you this atthe beginning.
I would usually ask this at theend but what do you think?
Where did you get yourentrepreneurial spirit from?
Thomas J. Knox, PHD, CLU, (05:48):
When you're growing up poor, you
don't want to do it again.
It was necessity, right?
Yeah Well, I had three youngerbrothers.
None of them were verysuccessful.
The one that was next in lineto me had a fish business and he
was pretty successful, but atthe end he let one of his
clients, seafood Chien.
He get a $300,000 tab and thenthey went bankrupt and that put
(06:12):
him out of business.
Marc Bernstein (06:16):
But so what?
Where were you different thanyour other siblings?
That made you successful, doyou think?
Thomas J. Knox, PHD, CLU, C (06:22):
You know it's hard to say that they
just weren't theentrepreneurial type you
successful, do you think?
You know it's hard to say thatthey just weren't the
entrepreneurial type?
Marc Bernstein (06:31):
You know, and it's a desire, so you were.
It came with the package withyou.
Thomas J. Knox, PHD, CLU, (06:36):
Well , I was always very prolific in
my reading.
You know, you only go to the10th grade and you wind up in
2010 with a PhD.
Right, you had to do somereading, yeah, and I was a
prolific reader.
Ah, okay, I knew the tax codebetter than the two tax
attorneys that worked for me,and both of them had their
masters in tax.
Marc Bernstein (06:57):
Right, we were jumping ahead to when you got in
the financial services industry, I know, but yes, are you still
a prolific reader?
Thomas J. Knox, PHD, CLU, ChF (07:05):
I still am.
I mean, I must read six hoursevery day, at least six hours a
day, do you really that's?
Marc Bernstein (07:11):
great, that's really remarkable.
So after you got out of theNavy, is that when you went into
the life insurance business,well, you had to wait until you
were 21 to get in the lifeinsurance business.
Thomas J. Knox, PHD, CLU, Ch (07:23):
So first I was selling great books
of the Western world, so I hadto buy a set of them and they
sold them to me for very littlemoney, Like the encyclopedia
guys.
Marc Bernstein (07:33):
Yeah, same thing .
Thomas J. Knox, PHD, CLU, C (07:35):
But there's like 50 of them, so I
still have the ones I bought in1962,.
Announcer (07:42):
I guess it was.
Thomas J. Knox, PHD, CLU, ChF (07:43):
I still have every one of those
books Now.
A couple of them I've read, butmost of them great books of the
Western world.
I still have about 40-some togo.
Marc Bernstein (07:53):
I don't know if I told you, but I sold cookware
to get myself through collegehigh quality cookware, you know.
Same idea, same sales methods,all that.
There's a company calledAmerican Future Systems, the
creator of that.
I don't know if you've run intohim.
Ed Sattel is a big Philadelphiaphilanthropist now Sattel
Institute I'll have to introduceyou to.
Ed.
Sattel is a big Philadelphiaphilanthropist now.
No, I never met him.
Sattel Institute I'll have tointroduce you to the Sattel
(08:15):
Institute.
I'll tell you that offhand.
Thomas J. Knox, PHD, CLU, (08:17):
Well , my son is one of those.
He sold cutlery yeah, verysimilar For about a year.
We still have Cutco, cutcoCutco is what it was.
Yeah, and I still have everyknife and fork and butcher knife
that he sold me and they'restill working good and that was
like 30 years ago I shouldn'tsay this on the radio.
Marc Bernstein (08:37):
My cookware was fine too, but my wife threw it
away.
She didn't like it.
She was used to a certain kindof cookware, but it was good.
It was guaranteed not to stain,pit, tarnish, rust, warp, chip,
crack, bend or break for life.
It was great stuff, but wedon't still have it,
unfortunately.
It was called Wonderware.
Thomas J. Knox, PHD, CLU, Ch (08:56):
My wife wouldn't throw it away
because my son sold it to us.
That's right.
Marc Bernstein (09:01):
Right, right, it would be different.
My mother wouldn't have thrownit away.
My wife threw it away, anyway,so you got in the insurance
business.
Thomas J. Knox, PHD, CLU, (09:10):
Well , I started in the insurance
business on a debit.
Now most people don't know whata debit is Right, but back in
the 60s a debit was when youwent door to door collecting
nickels, dimes and quarters forpolicies that had a death
benefit of anywhere between $100and $1,000.
Maximum death benefit $1,000.
And I was going around down inRittner Street all the way down
(09:35):
to Oregon.
You know Rittner Street down toOregon Avenue, from Broad
Street up to 23rd Street andwhat company was that for
Metropolitan?
Marc Bernstein (09:44):
I thought I was going to say I thought it was
MetLife Metropolitan.
Thomas J. Knox, PHD, CLU, (09:46):
Life it's called it.
I was their best just startingin the business.
In 19 weeks they have the firstquarter is 19 weeks I sold 93
policies to the people on mydebit.
Wow, and the manager in theoffice says that was more than
the other 14 guys did together.
So we're taking you out of thatbusiness and putting you into
strictly sales.
So I've done very well sellinglife insurance.
(10:10):
I mean, your numbers arephenomenal.
Well, back in the 80s like in83, 4, 5, and 6, I sold over a
billion dollars worth of cashvalue life insurance.
Marc Bernstein (10:23):
Yeah, they weren't $1,000 death benefits
anymore.
Thomas J. Knox, PHD, CLU, Ch (10:25):
No , now they're million dollar
death benefits and people alwayswant to know how I did that.
Well, it was marketing, and Ithink I was always really the
best marketer.
There was only one guy that wasa better marketer than me.
His name was Alan Shine.
He turned out to be his wifegot rid of him because he was
(10:47):
scrutinizing with other women.
Now I've been married to thesame one for 50 years, so I
don't do that stuff, but he did.
Marc Bernstein (10:54):
Gotcha, but in death benefit I know you sold
billions of dollars yeah.
Thomas J. Knox, PHD, CLU, (11:03):
These policies were over a billion
dollars cash value lifeinsurance.
My commissions were $9 milliona year, million dollars a year.
But you know, I remember that Isent my qualifications in to
get admitted to what they callthe top of the table.
Now, in order to be at the topof the table back in the 80s you
(11:24):
had to do 12 million ofinsurance cash value.
If you were just a milliondollar round table, you had to
do 2.3 million.
I was doing a billion.
I called so the guy I sent myqualifications and the guy
that's running the program callsme up.
He says, mr Knox, you got toomany zeros on this thing.
Nobody can sell that muchinsurance.
I said, oh, I did.
He said no, you didn't.
(11:45):
He says you're companies in theUnited States and there's 870
of them.
Marc Bernstein (11:57):
They don't and most of them don't sell a
billion dollars.
You're going to have to getmore proof.
You told me a story beforeabout the.
Thomas J. Knox, PHD, CLU, C (12:02):
You were in the wrong line to
accept an award.
Oh, that one, yeah, I was with.
I was a leading agent forEquitable in 77, 78, 79, 80.
Marc Bernstein (12:09):
Unbelievable, yeah.
And what happened when theytold you?
It was a funny story when youwere in the wrong line.
Thomas J. Knox, PHD, CLU, Ch (12:13):
Oh yeah, well, that one.
So I had started with Equitablein 97, or, excuse me, 79.
And I had only been with themfor about four months.
And in order to get this awardyou had to earn $100,000 in
(12:34):
commissions.
And Ecuador had 2,500 people attheir annual outing that they
have for four days.
So they have you coming up inthree different lines to get
these awards.
So I'm in the line to get thisaward where you get a sword and
a.
I forget what they called thataward, but the Excalibur Award,
(12:58):
that was what it was.
So I'm in the line and I'mtalking to this guy in front of
me and he says who do you workfor?
I said Cabar, blah, blah, blah.
He says how long have you beenin the business?
I said well, I started withEquitable four months ago.
He said holy shit, you're inthe wrong line.
Announcer (13:17):
Nobody could earn $100,000 in three months.
Marc Bernstein (13:20):
They couldn't believe you did those numbers.
I was always very good atselling, so I want to point out
you were a lot more than asalesman, though.
You're an entrepreneur, becauseyou built an organization.
I know you were sellingcorporate insurance.
You were selling life insuranceto companies.
Thomas J. Knox, PHD, CLU, (13:36):
Well , I was selling non-qualified
deferred compensation plans andthat's how Carb.
Well, I was sellingnon-qualified deferred
compensation plans and that'show Carbarth and I'm looking up
in that building over there ithas their name on top of it
Carbarth and I saw I got GeorgeCarr and Bob Barth wanted me to
come to work because I had aprogram that I developed to
present non-qualified deferredcompensation plans and they
(13:57):
wanted the program Right.
Marc Bernstein (13:59):
So you taught them how to do it, because
George Carr became a bigproducer.
Oh, yeah, Well.
Thomas J. Knox, PHD, CLU (14:03):
George Carr.
He was never a big producer,but he had a big agency, Right
right.
He didn't sell much himself,and neither did Bob.
Bob actually went to the homeoffice, Home office.
He became the CEO.
No, he never became CEO, but hecame in a very high, maybe even
executive vice president.
Marc Bernstein (14:20):
Oh, I thought he was president, but he died
before he got there.
Thomas J. Knox, PHD, CLU, Ch (14:24):
Oh really, yeah, bob died.
Young George is still alive.
I think he must be about 90 now.
Marc Bernstein (14:29):
So, anyway.
So you broke all kinds ofrecords doing that.
Yep.
Then what happened?
Oh, you know what.
Then what happened is oh, youknow what.
Then what happened is.
Thomas J. Knox, PHD, CLU, (14:37):
Well , I'm going to tell you how I
sold all that insurance, becausepeople don't understand it.
Marc Bernstein (14:41):
Well, I was going to say one.
We've got to take a quickcommercial break, so we're going
to get right into that rightafter we come back.
Okay, good, we'll be right backon Founders Forum.
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Marc Bernstein (15:57):
Visit GLASAorg.
We're back on Founders Forumwith our guest today, Mr Tom
Knox.
He had a very distinguishedcareer in the financial services
industry and has done very muchsince then.
So, Tom, in the interest oftime, I know that you did very
well in the business and thenyou ended up selling out of the
life insurance business, thebusiness and then you ended up
(16:18):
selling out of the lifeinsurance business.
Thomas J. Knox, PHD, CLU, (16:20):
Yeah , I sold my life insurance
business on December 23rd of1986 when the new tax law went
into effect January 1st of 87.
Right.
Marc Bernstein (16:28):
And then I know, then you got into the, so you
got out just in time.
Thomas J. Knox, PHD, CLU, (16:32):
Well , I retired, but after three
months my wife kicked me out ofthe house.
She said you're bothering me,the kids are not happy, the
dog's getting mad.
Right, buy yourself a job.
Marc Bernstein (16:46):
Right, so that was almost 40 years ago that you
retired basically.
Thomas J. Knox, PHD, CLU, C (16:49):
And I bought a lot of different
companies.
I bought a bank Right, I didthat one.
Crusader Bank was the secondlargest savings bank in
Philadelphia.
I bought a distillery and awinery.
We were selling Chateau Luzernein my wines A million cases a
year.
A million, 200,000 cases a yearin Pennsylvania.
You didn't buy a tap room, didyou?
(17:09):
No, none of your father.
No, my wife doesn't like thatbusiness.
By the way, I understand I didhave a couple of restaurants.
They're the only business thatI ever bought or got into that I
made money on.
Are those two restaurants?
Those are hard.
Which ones did you own?
I owned La Terrasse.
Oh, yeah, yeah, that was a bigdeal in the 90s and so forth,
and then I sold it to Tony.
(17:30):
What's his?
Marc Bernstein (17:33):
last name.
Now I forget right Any lessonslearned from being in the
restaurant business.
Thomas J. Knox, PHD, CLU, (17:37):
Don't get in it, Unless you're going
to be an owner and on site.
Right right, If you're on siteyou can make money.
But what?
Works out the back door andgoes through the bar is
tremendous.
Marc Bernstein (17:50):
I would learn that watching clients,
especially construction people,that would get into the
restaurant business.
And a number of years ago I wasin a partnership.
We bought a commercial buildingand they said, oh, we've got to
have all this equity, we'regoing to get another business.
And I said what is it?
They said a restaurant.
I said I'm out.
And they said what do you mean?
You're out?
I won't go to the whole story.
Thomas J. Knox, PHD, CLU, (18:13):
Yeah , it was a good choice.
I saw too many of turkey farmsdown in South and North Carolina
.
I had a million and a halfbirds on the ground at one time,
figured out how to get them tomarket sooner, figured out how
to feed them better All oncomputers.
Wow, that was in the late 80s,early 90s.
Did you sell that business?
I sold that business in partsand tripled my money on that
(18:37):
business.
I was in an internationalharvester dealership, a
commensal dealership, amazing Afew others.
I forget the names right now.
Marc Bernstein (18:47):
I'm going to come back to the health
insurance business, butsomewhere in there, what years
did you get into politics?
When was that?
Thomas J. Knox, PHD, CLU, (18:54):
Well , I became deputy mayor in 92.
I was Ed Rendell's largestfundraiser and his biggest
contributor.
Yeah, I lent him $50,000 onDecember 26th of 91, or 90, was
it 90,?
So that he'd have a war chestof a million dollars, and he
(19:14):
paid me back eventually.
It took him 15 years.
Marc Bernstein (19:18):
And then I mentioned, you became like the
Elon Musk of the Rendelladministration.
Thomas J. Knox, PHD, CLU, (19:21):
Well , he, made me deputy mayor in
charge of management andproductivity and at the time we
had a quarter of a billiondollar deficit on a $2.2 billion
budget and we had that runningfor three years.
The state was going to take usover.
He wanted me to clear it up andI did that and to tell you the
truth, that was a lot of funbecause if I could spend an hour
(19:42):
here telling you all the funnystories about people then what
we had to get them to do.
I remember when I was talkingto Kumar Kirshenhand, who was
the water commissioner.
We were trying to get all sixfleets together because they
were having a lot of Nobody everhad all their vehicles were
down because they didn't haveaccess to the other warehouses.
I went in to see him and he saidwe're not doing that.
(20:04):
He said I'd rather resign thando that.
I said here's a yellow pad,write it out.
I'll take it to the mayortomorrow.
He said well, what do you mean?
He finally signed the pay.
So I never we commit and now'reable.
We had 25% of the police carswere out any one time.
We reduced that down to 8% ofthe police cars because they had
access to the other five otherauto parts places.
Marc Bernstein (20:29):
You.
I know he wanted to pay you asalary for that position and you
wouldn't take it right.
Thomas J. Knox, PHD, CLU, (20:34):
Well , you know when you're going to
go in and start cutting people'ssalaries or their holidays, you
know we didn't cut their healthinsurance benefits.
When you're going to go in andstart cutting people's salaries,
their holidays we didn't cuttheir health insurance benefits,
but we cut the cost of theirhealth insurance benefits.
It was a big deal to cut thatthey still don't like me for
that.
Marc Bernstein (20:52):
Well, I remember that was a big deal back then
that you were able to do allthat cost cutting and turn a
surplus for the city.
Yeah, and I made them go intodifferent types of plans.
Thomas J. Knox, PHD, CLU, (21:00):
They had these big signs.
They were walking around CityHall with my picture and another
guy's picture.
I forget his last name, alan'slast name.
But do you want these men to bepicking at your gynecologist?
Is what the sign said.
Oh God, in my picture andAlan's was on it.
But I eventually got into thehealth insurance business and
that's where I've been for thepast 25 years, basically.
Marc Bernstein (21:24):
And did you enter as CEO of UnitedHealthcare
?
You were in it before that,obviously.
Thomas J. Knox, PHD, CLU, (21:29):
Well , I bought my own insurance
company in 99.
Okay, it called FidelityInsurance Group Right, and I
took it from a company that had$8.5 million of revenue and 10
employees to a company that had$70-some million of revenue and
280 employees.
And I had built up a very bignetwork in Pennsylvania not in
(21:53):
Pennsylvania five-county areawhich UnitedHealthcare liked.
I was about to sell my companyto Oxford and he called me up.
He said I want you to talk tothese people at UnitedHealthcare
.
I said well, ed, I'm talking toOxford and they're giving me a
good price.
He said I don't care whatthey're giving you, you owe me.
I was the one that got you intothat business with all those
(22:15):
hospitals.
I said you're right, I'll waitand talk to them.
So the first time he came outhe called me up and he said we
can't do it.
Rendell was talking to the CEOof United Oil.
The CEO was going to the guythat's in charge of acquisitions
.
He was going to one of hisemployees and he calls me and
says tell me about your companyand he says we can't buy your
(22:36):
company, it's too damn.
Tell me about your company andhe says we can't buy your
company, it's too damn, we don'tbuy the companies that are that
small.
I said, well, that's okay,right, and we hung up and I told
him.
Right now, I said this is whathe told me.
I says wait there 10 minutes.
10 minutes later, this guy callsme back.
He says when can I come out?
I said you can come out Monday.
(22:59):
I'm selling it to Oxford onTuesday.
He came out Monday and heoffered me more than twice as
much than Oxford was offering me.
Wow, and the reason was I had anetwork.
The only two companies rightnow that have a really good
network, or three, is Blue Cross, Aetna and UnitedHealthcare.
And UnitedHealthcare wasgetting a $20 or 20% discount,
(23:23):
blue Cross was getting 74%discount, aetna was getting 70%
discount, I was getting 68%discount, so they went from 20%
to 68%.
Wow, and they never soldanything in Pennsylvania.
But 60% of the Fortune 500companies were clients of
UnitedHealthcare, so they had144,000 people in our area.
(23:48):
Right, yeah, they saved $250million a year for their clients
Because of that acquisitionyeah, unbelievable, but in any
event, one of the parts of mycompensation package which is, I
mean, this is the first timeanybody ever was paying me a
half a million dollars a year,and that's in 2004.
Announcer (24:08):
Way back.
That's like a million and a halftoday.
Yeah, yeah.
Thomas J. Knox, PHD, CLU, C (24:11):
But the amount of money they paid
me was ridiculous and they gaveme a lot of stock options and
when they left me go they gaveme a bonus.
Marc Bernstein (24:20):
that was you know really a big thing You're
talking about.
When you were.
Thomas J. Knox, PHD, CLU, C (24:25):
CEO when I was CEO of.
You know the guy that gotkilled about four months ago.
Yeah, yeah, he had my job.
Marc Bernstein (24:33):
Right, I know that's the job I had.
We talked about it.
I said thank God there wasn'tyour job today.
Thomas J. Knox, PHD, CLU, (24:39):
Well , thank God nobody was shooting
back then either.
Marc Bernstein (24:42):
Right, it's crazy, right, Really interesting
story.
So since then, you're still inthe health insurance business.
So you founded we want to talkabout that.
So you founded, we want to talkabout that.
So you founded Homestead and Ibelieve you sold a majority
interest in that and now youhave a pinpoint health benefits.
You want to talk about that fora minute?
Sure.
Thomas J. Knox, PHD, CLU, (25:02):
Well , homestead is in the large
group business, pinpoint is inthe small group business.
We're selling groups of fivelives to 125 lives and every
time we quote, we're somewherebetween 10% and 15% cheaper than
Blue Cross.
And our partner is PennMedicine and if you go to Penn
(25:23):
Medicine and you have any one ofour plans, they do not charge
you for your deductible or yourcoinsurance, so you basically
can go to Penn Medicine for free.
Now when you tell smallemployers that they can get
their employees no deductible,no co-insurance and their
employees are always complainingabout the deductibles and
(25:44):
co-insurance that's a big dealand especially when it's the
best hospital in the state and15% cheaper.
Sometimes they're 25% and 30%cheaper.
Marc Bernstein (25:54):
It's an amazing value proposition.
Any small businesses listeningbecause we have a lot of
entrepreneurs listening theyshould check out Pinpoint for
benefits, because I don'tusually advertise.
Thomas J. Knox, PHD, CLU, Ch (26:08):
We enrolled our first people on
May 1st and we have a bigenrollment coming up on July 1st
Interesting, so we're doingwell.
But people like the fact thatthey can get independent
medicine and there's nodeductible or co-insurance.
Marc Bernstein (26:22):
I have two quick questions for you, because we
only have believe it or not,about a minute and a half left.
One is looking out three yearsbecause, again, you're still
full of lots of energy and stilldoing a lot of things.
What's your life look likethree years from now, Tom?
Thomas J. Knox, PHD, CLU, (26:37):
Well , I hope.
I'm on a cruise ship in theMediterranean with my wife.
The problem is I have two dogsand she won't leave them and the
cruise ships won't take them.
Marc Bernstein (26:46):
We have that issue too.
It's funny you say it.
I talked my wife into going onan Alaska cruise and leaving the
dog.
We're going to do that.
We have one more minute.
So real quick, tell me realquick.
You've mentioned your wife.
Tell me about your wife, family, kids.
Thomas J. Knox, PHD, CLU, (27:01):
We've been married 50 years now.
We were married 50 years lastmonth and it wasn't a hard thing
.
People say how do you staymarried 50 years?
I say our arguments never lastmore than a minute or two and we
forget about what we werearguing about three minutes
later.
It's amazing.
Marc Bernstein (27:17):
And that's the truth, tom.
We covered a lot of groundtoday.
I really appreciate you beinghere today.
We could have talked for hoursmore, but thanks so much for
being here, mr Tom Knox, andthank you all for listening to
Founders Forum and we'll see youagain next week.
Announcer (27:36):
Go to Pinpoint.
We hope you enjoyed your timewith Founders Forum and that you
found value to take with youthroughout your day.
Join us again next week.
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