David 0:00

There is a shift happening in our industry around managing healthcare costs. And there are loads of things we've talked about, many of them on the podcast, many new advances and whatnot. One of the new tools that you may not have heard of that's being deployed is called Integrated Optimization Platform. And I don't know what that is, but we're going to find out on this episode of Shift Shapers.

SPEAKER_03 0:22

This is the Shift Shapers Podcast, connecting benefits advisors with thought leaders and entrepreneurs who are shaping the shifts in the industry. And now, here's your host, David Saltzman.

David 0:35

And to help us answer that question, we have invited Rob Gelb. Rob is CEO of Valence Health, and he's working on supporting that shift. And he's going to talk to us all about the problem, the solution, and how we move to the next step. Rob, welcome. David, it is my pleasure to be here. Thank you. Thank you so much. So just a brief bit about your journey. How do you get to be doing what you're doing today?

SPEAKER_00 0:57

Well, I'd like to say that it was all planned, but like all the good things in life, it's kind of happenstance at times. You just kind of evolve into it. You know, my career started in accounting. I'm a CPA by background and did some things in finance and did a couple of things in the MA and transaction world. And then I settled into managed care for about 23 years on the property and casualty side. So principally workers' compensation. And then I made the shift, no pun intended, of course, to your audience, over to the group health side about four years ago because I saw an opportunity and it presented itself magically. And so I just made that move and it's been the right shift for us.

David 1:34

Well, Lord knows we need all the smart and innovative folks that we can get in the industry. You know, it's interesting time. Arguably, if ACA did not do anything, it really shook up an industry that needed to be shaken up and now has us looking at things in all kinds of different ways. And that evolution will be good. There's just, you know, I was with a group a couple of weeks ago in Miami who are doing all kinds of really new pioneering things, and I reminded them that the way you can tell the difference between the pioneers and the settlers is the pioneers are the ones with the arrows sticking out of them. Yes. But we've got to have those folks. So before we talk about what an integrated optimization platform is, what's the problem we're working on?

SPEAKER_00 2:09

Wow. So we're working on, I think we're working on two major problems. I think we're working on an acknowledgement by the market that costs, quality, and proper utilization of medical services needs a change, needs to evolve. I think right alongside that is the buyers, the people, the facilitators of decision need to be bold and comfortable being uncomfortable making change. Because one can't happen without the other, right? You can recognize you're in a moment requiring something different, but if you're unwilling to do different, you're not going to get different. And so that's what I think we're dealing with. And so I'm sure we'll get into this here shortly, but that's really kind of a two-parter, in my opinion.

David 3:01

So is it mostly a cost play, or is it an equal parts cost and quality play?

SPEAKER_00 3:05

I don't know that it's equal. It's a triangulation, really. It's three parts. There's quality, which can sometimes be nebulous and is almost defined as what's the lowest cost. There's a cost play. Are you being efficient with the way you spend medical dollars? And then there's an advocacy/slash utilization play, which is in addition to high quality, are they also getting the tie the member being the they, are they getting the type of service and the quality and the proper service they should? And so we treat that as balancing an equation of that triangulation between quality advocacy and cost.

David 3:40

Does place of service also enter into that?

SPEAKER_00 3:42

It does. It does. And so if you can stay outside the hospital as much as possible, if you can leverage primary care as often as you can as an entry point, you're going to find greater efficiency, you're going to find better value, and you're probably going to help improve overall outcomes as well.

David 4:05

So that's kind of on the qualitative side. Can you define for us the scope of the problem on a quantitative side?

SPEAKER_00 4:10

So on a quantitative side, you probably have, I would again put it into threes, David. I would for your audience, it would be number one, you have a metric of transparency that is hard to define if somebody doesn't give you the toolkit to do it. And so what we've found is there's an abundance of spend that's unnecessary. That's I'm going to pick a number, a random range. 20 to 30% of spend is too high, give or take, in that range. You also have a situation where the management of the medical spend is done inefficiently to yield that 20 to 30% curve that could be reduced. And as a function of that, you have rising cost out of pocket to the member, and you have rising cost in the form of premium for an insured program at least to the plan or the employer. And so you have those two. You have an opaque nature of data, and then why did my rates go up? Well, I can't share that with you, but they did. And then, of course, you have a poor member experience too, which is qualitative and quantitative, because members will speak loudly about the fact that they really don't understand what's happening to them in the system.

David 5:20

You know, and a lot of that is part and parcel of people now looking at self-funded plans as kind of the savior because at least they get some transparency, even if it's dirty data, there's still some transparency as opposed to none. I mean, employers for a long time have been like, you know, that fellow out in a rowboat without oars, without a motor, without navigation equipment, and he's out in the middle of the ocean. He's he just goes wherever the currents take him. And there's been a growing dissatisfaction, you know, with that. So altogether, all the things put together that we just talked about, it sounds like a giant mess. How do you go about untangling that? What do you attack first?

SPEAKER_00 5:54

Yeah. So what's really interesting about what you just said is the self-funded employer. So I want to maybe go there for 30 seconds and talk a little bit. Depending on the network, so the medical network that's being accessed, even if you're in a self-funded, self-insured plan, you could have the look and feel of being stuck in the same challenges of a fully insured program. Sure. Right. So part of it is we're educating our audiences. We're working with benefit consultants, trusted advisors, the broker community, whatever the right terminology is for folks, feel respect about the way I'm referring to them. We're working with them. And we're starting with a were you aware? Are you familiar with this pain point? And do you see this going on in the programs that you're advising for your for the groups that you serve? And then education turns into data. Let's get some information about your program. Let's start to make this a fact-based data-driven discussion about what's really going on. And then the third piece is core to our culture, which is we operate with this whole idea of we're going to go where the PUC's gonna be, not where it is and where it's going, so to speak. And we show them where we think their expenses are gonna go if they are continued, if they continue to allow them to go unmanaged or out of that balanced equation I talked about earlier.

David 7:18

Now I know that you also talk about four pillars and that those four pillars need to be aligned. What are they and why do they matter?

SPEAKER_00 7:25

So the four pillars I believe you're referring to are the circle of innovation, the cultural components of our business. And so we believe that, you know, we operate from the principles of simplify the complex, get comfortable being uncomfortable, spilled milk, and yes and. And I'll explain them very briefly. Simplify the complex is exactly as it would sound to you and I, right? This is a messy, messy business. It's hard to understand. We just talked about the opaque nature of data availability. We try to simplify that. And we make sure that even if we have to jump through 900 hoops to get something done, the member, the plan, the broker, the TPA, the stop loss, whoever our partner is in that equation, and all three of them, all five of them typically are, we're making it simple for them to find us and let us do the heavy lift. That then means we have to empower our people then to make decisions. They have to be engaged and they have to want to help who's in front of them. And that means that sometimes they're gonna make decisions without all of the information and we're comfortable with that. So we get them comfortable being uncomfortable in unfamiliar ground and making choice and decision. They get a lot of it right. Spilled milk means they get it wrong sometimes. And so we embrace this idea that we're gonna learn from our mistakes. And so we're gonna encourage people to try hard and spill milk so that we can clean it up and learn, and everybody benefits going forward. Yes, and is a cool one. It comes out of the improvisational comedy world. I think we talked a little bit about this previously. I learned two things going to a five-day workshop. One is I am not an improv comic. And two, this whole idea of yes and really is just an inclusive and an is a transformative way of doing business. And so we don't use the words no but or however in our environment. We're constantly ideating and taking ideas and recommendations and engagement from every level of our organization, including our customers. And that's how we become a better innovator because we're on the cusp every day of learning and realizing what needs to be done to get it right.

David 9:20

Is the goal or one of the goals of all four of those things to help your clients move from being reactive to being proactive?

SPEAKER_00 9:28

It is. It is. Yeah, we have a brand promise that connects that. It's called engage early and often for smarter, better, faster healthcare. And the whole idea of engaging early and often is the world doesn't happen to you. You make things happen in the world. And so if you can start earlier in a process, if you can leverage data to allow you to start earlier and also give you kind of a pinpoint moment of where to start, you have a much better chance of getting a positive outcome.

David 9:57

From among the clients that you've de-identified, of course, that you've worked with, can you give us an example of a beginning, a middle end of a process or a beginning and a middle end, an improvement of the process that's still ongoing?

SPEAKER_00 10:09

Yeah. So, you know, historically our business was we would call a very modular business. We had a lot of point-solution approach. That was the nature of the world, you know, 10, 15 years ago, is you you operated with a single-point solution and you worked for potentially a TPA. In today's environment, the integrated platform is a better solution because it brings together all of the components of a needed solution, leverages them from a data perspective, and a streamline of efficiency of process. And so we have, so that's the world of today. So I would give that example. A couple of years ago, we got involved with a group. They are a subset of a much larger association, if you will. And they were operating with a self-insured plan that really looks more like a fully insured plan, network design, that whole data opaqueness, poor member experience, et cetera. And we got them to a place where a portion of that membership came over to us and started with us with a program. And in the course of that, they got navigation, they started realizing more efficient workflow for their members. Their members started commenting over the first year what a better experience they were getting. And as a function of that, at the end, when we measured year over year, we looked at their overall plan spend and tried to what I would call common stores, common store or same store sales look at it. 57% improvement in their overall medical spend in their first year with us. That then begot a much larger group population of the previous group moving over. So we've literally quadrupled the size of that membership that is migrating to us as a function of being able to prove that this model works and drives outcomes, improves member experience, and helps them balance, if you will, the cost equation for their program.

David 12:05

So if I'm I'm a benefit advisor, what is my initial conversation around this integrated optimization platform? What does that sound like with an employer who's struggling?

unknown 12:14

Yeah.

SPEAKER_00 12:14

So we're going to ask more questions than we're going to give answers to. So we don't, our approach is really consultation. It's true consultation. It's true collaboration and say, okay, tell me, here's what we do. Now, think of a situation where you have a client or a set of clients, Mr. or Mrs. advisor, trusted advisor, that might want to learn more about these pain points that they have. And do you can you identify groups that have that? And so that's typically where it starts. From there, it's well, let's do this. Would you get approval from them to share some data with us? What we found is nearly 70% of the time, if we identify the right groups, the data tells the story and the data drives a decision to make a change. And so when we get data, we really help that advisor pinpoint the pain for their customer. And then that customer and us start to engage and have conversation that really moves the needle on transforming their program and really changing the way they think about healthcare and how they can fund it and support their employee base and their dependence of those employees, access high-quality care at a much more effective cost.

David 13:25

So a lot of discussion these days around UX, around user experience. When this all trickles down from the C-suite to the member level, what do the members see? What do they notice? And how do you communicate that to them?

SPEAKER_00 13:37

Yeah, so there's no one size fits all, obviously. So it depends on the individual groups. Some of them were involved right at the gate at open enrollment, maybe some health benefit fairs where we get to sit and talk and meet with the members and the HR staff and describe to them what they're going to experience. Others will have it described to them through their HR teams, through manuals and books and presentations and collateral that we'll provide. Ultimately, when the rubber hits the road, so to speak, meets the road, we're going to be that call. We're going to be that number on the back of the card. And they're going to have their first experience entering their healthcare journey with a Valence Health intake coordinator and team member that's going to start to ask some fundamental questions about how can I help you today? What are you looking for? Are you looking for direction of care, coordination of care? Do you know what your benefits are? Can I help you understand what an in-network selection for you looks like versus choosing to go to that facility that you're thinking about, which is out of network? Can I provide you with information about these providers and the quality scores that they have? Can I make an appointment for you? And so that's what we're going to do as an advocate on the front end for that member.

David 14:47

The part of the challenge in all of the innovation that's happening is that at the end of the day, while, you know, it's it's like that old Listerine commercial, the the taste you hate twice a day, members may be dissatisfied with where they are, but they really like that experience of one card with one logo on it. Would yours be the only logo on the card and all things get funneled through your organization? Or would there still be multiple logos? And what's the impact on end users?

SPEAKER_00 15:13

Yeah, I think it's a really good question. So it could be is probably the best answer. It's probably not the most fun answer, but it's the honest answer. We would be all things medical. When you start to talk about administration, we're going to have to partner with the TPA, but they could still call us and we could coordinate. Pharmacy is a place where today we partner and collaborate with PBMs. We do have a partnership on the high-dollar, low-volume specialized drugs, so that can coordinate through us. Your PBM would be a separate, obviously. And we would share data. The yes and to that is that would probably be a separate card, is for pharmacy.

David 15:50

You spend a lot of time thinking about the future because today is here what where you guys are driving is where the puck's going to be. How can you, or how can we as an industry provide that one card, one logo experience that members want while still having all of these amazing expanded services and touch points on the back end?

SPEAKER_00 16:12

Yeah, I think it's a fair question. So I would like to say that very quickly, we'll be able to be the single point and we will coordinate or quarterback things that aren't necessarily directly delivered by us, but coordinated through the plan. I think that's what the members really do want. The other thing we're seeing, you know, I'll bring this word into the conversation, is an omni-channel desire. This whole concept, if people are unfamiliar with it, of meeting the member, meeting your customer in the way, in the medium, at the time, with the right resource that they want to be met. So if it's two o'clock in the morning and you've gotten up and you're want to figure out where do I have to go for healthcare, how do you find me? We have a means for you to communicate and a medium for you to access that. You want to speak to somebody live, you want to do through text or chat. You know, in 1984, when I bought my first car, I lived on Long Island and I did it through News Day. I looked in the section where cars were, I found the car that fit my price and I bought it. I did no research, maybe Chilton's, right? So your audience may or may not even know who Chilton's is. But today, I've bought three cars in the last two years for family, and one was a straight up Carvana shipped to my house. The other was I bought it online and picked it up. The other was I went to the dealership and touched the car I was going to buy. We want to have that type of experience availability in healthcare access when we build our model.

David 17:39

Yeah. I mean, I think the holy grail, especially because the generations are shifting and how they interact with systems is shifting, is really to have a as frictionless a system as you can possibly have. And again, I was at this meeting a couple of weeks ago with a lot of folks who are doing a lot of pioneering work and it's fascinating. But we heard at the same time, yeah, but, you know, not yes and, but yeah, but they want that what appears to them to be single logo, single touch point experience because there's no friction. And if you start using centers of excellence and rewriting SPDs, so you're required to go here or there, or there's a difference, all of a sudden you're you're giving a better product. And all those of us who are inside the mayonnaise jar understand that, but you're also introducing complexity. As you look at the future, how do we build that as an industry so that it appears as frictionless as it appears, using my words very carefully, today?

SPEAKER_00 18:33

Yeah, I think we're about as close to being that today as people need us to be. Again, with the exception being the PBM aspect of pharmacy, we don't control or dictate that, that we manage the data when it's provided to us. We own and operate an MGA, an MGU rather, excuse me. So that means we're in the stop loss business. That means we're evaluating plans so that we can underwrite properly how does that plan get managed in the cost containment arm of what's being enabled. And so we've created a straight path, if you will, from plan design to underwriting the stop loss to adjudicating and administering the medical cost containment arm of the program. We're not a TPA. I don't know how often a member really needs to worry about what the TPA is doing if we're doing our job well. Our job is to make the TPA look good. Our job is to make the broker look smart having recommended us. And our job is to keep the employer happy by having their members say this has been an amazing experience. And I think that what I would call the quadruple aim approach, we're doing that today. It's not perfect. Nothing ever is. But this is about as close as you can get to a single point of coordination to make sure all of those things are aligned, right? It's this is all about alignment and balance. We talk about that in our business all the time. Sure. So there's a balanced equation and there's an alignment of parties. And so everything we do, and I think everything that that group you're describing is trying to do, probably, is to say the patient, the plan, the payer, the provider, the four Ps, they're all in alignment. They all understand what's happening. They all have been educated and at least communicated with transparently. Member, here's what it is. Plan, here's what it is. Provider, here's what you can expect. Payer, here's what we need from you. And so if we're doing our job well on any given day, there's no surprises, there's no missed expectations. So things run smoothly, and we've reduced that friction. So there's more tailwind than headwind for the member.

David 20:39

And that's a great place to end our conversation for today. But as this evolves, we do hope you'll come back and let us know, you know, how these things are moving forward and how those problems are being solved. Rob Gelb, CEO of Valence Health. Rob, thanks so much for sharing your expertise with us today. Thank you, David. It's been my pleasure, my honor.

Announcer 20:56

The Shift Shapers Podcast is a production of Shift Shaper Strategies and may not be reproduced or quoted in whole or in part without our express written permission. Copyright 2020, all rights reserved.