David 0:00

There is absolutely no question that brokers change employers and employees' life every single day. The question we're asking today is: can brokers actually change healthcare? We'll find out on this episode of Shift Shapers.

Announcer 0:16

Change either paralyzes or energizes. The choice is yours. You're listening to the Shift Shapers podcast. You're about to learn firsthand from businesses and entrepreneurs who have successfully shaped the shifts in their industries. Get ready to become the change you want to see. This episode is brought to you by Shift Shaper Strategies. In sales, if you confuse, you lose. Clarify your message so you win more clients, crush your sales goals, and build your practice. Learn more at ShiftShaper Strategies.com. And now, here's your host, Story Brand Certified Guide and Chief Transformation Strategist at Shift Shaper Strategies, David Saltzman.

David 1:07

And we welcome Elaine Horton to the podcast. She's a partner at EBC in Austin, Texas. And she's the one who made that intriguing statement to me that she thinks that brokers are the folks who can actually fix healthcare. And that's a big order, but we want to hear her thoughts on how we do that. So with that, welcome Elaine. Thanks for being on the podcast.

SPEAKER_01 1:25

Thanks, David. It's great to be here.

David 1:26

It's our pleasure. Tell us a little bit about your journey. How do you get to be where you are?

SPEAKER_01 1:31

Yeah, absolutely. Well, I would say that I've been chasing challenges in healthcare my whole career. So I started at the University of Texas and I studied finance and I did investment banking and consulting and saw a lot of different challenges first in oil and gas. I live down here in Texas. And then my sister is a nurse practitioner. And over dinner one day, we were talking about the challenges she faces as a clinician in her world. And I was thinking about the business side and how so many of the issues that she deals with in healthcare are actually a result of the business side versus the clinical. And so from there, I shifted gears at Deloitte Consulting to work all in healthcare and really just saying, what's the biggest, hairiest problem we can solve? And let's go try to tackle that. So it started with providers and change management. Then it went to value-based care and new models of payment. Then it went to medical device and finding new ways for women dealing with uterine fibroids to avoid hysterectomy and minimally invasive procedures. And then throughout that whole journey, having an interest in the commercial side of how we pay for healthcare, given it's the largest portion of the market, and following Health Rosetta to find this new field that you said so eloquently in your intro of being a broker or healthcare consultant to employers who are paying for healthcare. So that is what my next venture was to chase challenges in healthcare and where I am today with EBC here helping employers pay for healthcare differently.

David 3:08

Yeah, it's always fun talking to people who've seen the system from a variety of different aspects because it it gives you a very different vantage point, I guess, overall. You kind of knit all those pieces together into one large photo, and then it looks a little bit different. So we talk on the podcast sometimes about healthcare being broken, and I always tell people it's not broken, it's working just fine. It's just not working great for the people who are the end users. It's working great for the people who built it that way. Do you see the problem the same way? And if so, what are the biggest broken pieces?

SPEAKER_01 3:37

Absolutely, David. Like you said, dysfunctional, not necessarily broken. And I think incentives are the biggest thing that are dysfunctional, built to be dysfunctional. So right now, the consumer is uh you and me and every are humans, right? We need healthcare. Yet the person paying or the customer varies, but for the majority of us, it's an employer, and for some of us, it's the government. And the people delivering the care or the delivery, clinicians, providers, etc., is one aspect. And then a financial middleman of insurance companies, PBMs, etc., lie in that equation as well. So the incentives being misaligned for the customer and for the user of the services, aka people, that is to be the biggest broken piece.

David 4:33

So let's zero in on, you know, that there are only a certain number of components to a claim. You know, there's location and there's cost of service, and there's all those kinds of little bits and pieces that we look at. If we were to look at the big kahuna of claims, which is facility claims, it's not doctor's office claims. Right. Where would you start to realign the incentives? Because there, as you point out, there's so many layers. It's maybe not quite as bad as PBM land, but it's getting there. Where would you start? What would you start doing?

SPEAKER_01 5:00

Yeah, David, it's interesting. I actually would start with the PBM land in the RX side versus the medical side on claims, which I believe even in the last five years is a change. I think five years ago, I would have said the hospital side and patient stays, different things that the hospitals are doing. But now I would definitely say the PBM, specialty pharmacy, orphan drugs, biologics are the place to start. The good news is the volume is lower, the price is higher. So the effort to impact scale or ratio is positive. That's where I would start.

David 5:36

Have the hospitals gotten better, or just the cost of drugs have gone up so much and the PBMs have gotten more opaque rather than more transparent?

SPEAKER_01 5:44

More of the latter. The only credit I'll give to hospitals is that maybe there's become more of a cap and more of a light on that. And so I think legislation and even trending topics such as not having your bills go to credit collection is helping curb that side a bit for me, at least personally, versus on the pharmacy side, that is adjudicated at the time of purchase or the time of delivery. And so there's less of the balance billing issue. Thus, in some ways, more of the egregious stealing on the back end to the employer. However, on the front end, you're not worried about a bill coming later for that RX unless there was an eligibility issue.

David 6:33

So where do you go to start taking cost out of the system?

SPEAKER_01 6:37

Well, first you start with your fixed fees. So your admin fees and your stop loss fees, your premium fees. And while those are relatively small pieces of the pie, you know, for let's say a self-funded employer who's paying for healthcare, or even a fully funded employer who's paying premiums, it's a huge pie that we're talking about. So it's okay to still start there. And it's uh somewhat easy, right? So you don't have to do member disruption, you don't have to talk about new doctors to go to, new ways to access prescriptions. So start with the fixed fee, start with the admins, start with your broker, start with your consultant. Do you know how much they're getting paid? Are they getting paid from the back door? Are they getting overrides? Where is their incentive? How much money are they making on the account? And then work from there. How much are your other carriers making on the account? Can you cut commissions? Can you cut random fees that they charge you? Are you, do you have a competitive rate on that side? And you don't want to spend all of your energy there. It also bothers us when we see, you know, others in our field focus so much on the admin fees or what you can save between one carrier or another or one PBM from another based on a fill fee. That's not the biggest piece of the pie. The biggest piece of the pie is the pharmacy claims and the medical claims. However, where to start would be that fixed fee part. And sometimes that's also setting the culture, right? You want a culture of transparency, a culture of who you're working with. And that's easier done right away on the fixed fee side.

David 8:08

But let's go back to the pharmacy side because while, yes, you know, fixed costs are something that is easy to see and an easier nail maybe to hit on the head than some of the pharmacy stuff. If you're dealing with a biologic or you're dealing with some of these incredibly expensive other drugs, what do you do to try to take money out of that system? What you know, obviously, you know, we've done the move to generic now. And on day-to-day drugs, it's not even a question of asking for generic. That's generally what's prescribed unless you get a DAW prescription. So how do you start taking money out of that?

SPEAKER_01 8:42

Yeah. Well, it starts with your PBM partner. So if you're doing a traditional PBM where you're getting rebates at the end of the year, are you actually getting that rebate check or are you getting a fixed PEPM that isn't actually how much you should be getting for the whole rebate check? So if you're gonna be getting rebates and you're in that model, you want the rebate check. You don't want an agreement based on a potential rebate amount, but probably even more so, you don't want to be in a PBM contract where you're doing the rebates. You want to be in a pass-through so that you aren't playing this game of spread pricing. So it's even there, you know, David, with your example of generics, with spread pricing, you could be paying a lot more for a generic than you need to be because of rebates. It's it's a backwards way to pay for things. So that gets you some of the money just to make that switch. And in some ways, that's easy, not very member disruptive. Uh, it's just a different way to pay for the drugs themselves and a different way to do business with a PBM partner. But the big dollars come from utilizing manufacturers' assistance for those specific drugs, which requires hand holding and advocacy with the member and needs to be a member that submits those applications and works with you. There are ways, of course, to hand hold and work with patients to submit them, you know, with them and to do all the checks. But manufacturers have assistance dollars available to give. And a lot of times the initial assistance amounts are not prerequisites for income. And then there are income-based assistance programs as well. So there's multiple ways to work on those high-cost drugs, but it starts with a flexible and transparent PBM.

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David 11:28

You've been around enough different facets of healthcare. Pharmacogenetic testing used to be a fortune of money. It used to cost thousands and thousands of dollars to do. And now a test can be done for, depending on where you are, $125 or $150. Do you see that starting to be written into plan documents to require that as a prerequisite for getting some of these biologic and designer drugs?

SPEAKER_01 11:53

Personally, I have not. It doesn't surprise me that it's something to be thought about and turned it on. And just knowing talking to my clinician friends, it's something that I think most, well, not maybe not most, but it's a topic in the primary care world of doing those types of tests just to help the patient. And, you know, the savings to the plan are secondary.

David 12:19

Yeah, there's no question the patient gets a lot out of it as well. It's not, well, let's try this drug and give it to you for six months and see if it works. And it doesn't work. And so you're still in misery for six months, and maybe you even have an adverse reaction or whatever. So, you know, it seems like it would be more of a kind of a no-brainer. And, you know, maybe we'll see that start to filter its way out a little bit. But let's go back to the broker aspect.

Announcer 12:41

Okay.

David 12:41

So you we've talked about a couple of places where we can like save some money and whatnot. But what do brokers do? If they're the ones who can change healthcare, what do they need to do to educate themselves? The folks who are health rosetta folks are a relatively small number. Yeah. You know, how do brokers educate themselves? And then how do they get their clients' attention in order to sit down and get into the granularity that's required to make these kinds of changes? Because it's not just Okie dokie, you will change the deductible. These are significant data-driven changes.

SPEAKER_01 13:10

Yeah, absolutely. I'm new to the broker world. I don't even really love calling myself a broker. It feels like an interesting term for what we do. So I I'm not going to pretend that I know what it's like to be trying to make a living and you know, growing up in the world of this is all I know and this is what I do. I sell insurance and I help it's an important role, it's an important job, and I and I don't want to speak negatively about you know peers and colleagues in in the field. So it's hard for me to answer that, I think, because I didn't, I don't come from that. So for me, it's like the answer is more employers need to understand what service they want and ask for it. Because it's different, right? Selling insurance or trying to find the best renewal is a much different job than what I think I do. I think I am an architect of health plans and I am an architect of building new ways to pay for health care, and I am an advocate, and I call hospitals and I talk to pharmacies. And that's very different than the job description of a broker. So I think if I was someone listening to this and I did call myself a broker and I said, I would like to change the way I do business and be more like this or try this other way, it's almost, I don't think it's necessarily trying to change your current book of business to be this new book of business, but more to find or talk to employers who are interested in this type of work and this architect role and see how you can fill that role for them. And there's plenty of employers knocking on the door for that type of role.

David 15:02

Yeah, I love that word that you used, architect. I think that's great. I mean, we're starting to use advisor more. And maybe that's a better word. What about commissions? I know that you're you're kind of from our pre-interview, your take on commissions is maybe a little bit different than somebody who's been doing this for a long time. Where's your thought process and why on that issue?

SPEAKER_01 15:20

Yeah, great question. So if you think back to the first question you asked, what's or maybe second, what's most broken in the system? And that's incentives. And so when we look at our own compensation and we look in the mirror, if I'm paid on commissions and commission is based on a premium for a product, that means I get paid more the more people who enroll and the more the price goes up. And I don't think that's aligned with my job description as an architect for the health plan to save money.

David 15:48

So how would you suggest that advisors make their money? It would is it a percentage of savings model? Is it a flat fee model? Is it a combination of the two? What kind of a motif do you envision?

SPEAKER_01 16:01

A fixed fee, I believe. I think you set your fee for the year for the services that you provide. And if you're doing one-on-one member advocacy and thus you need a service team, then you need to price it accordingly. If you're doing hourly consulting and you're helping them build a plan and you do renewals once a year and reports once a month, then what time does it take from you to do that and what is your time worth, right? And yeah, so I would say the short answer is fixed fee. I think there's also a world of meeting employers and people where they are in terms of their finance and their budget. If they're used to paying that fixed fee out of a certain bucket of money, then they're used to paying that fixed fee out of that bucket of money. But I personally prefer the fixed fee model even to paying out of the bucket of money of commission, say from ancillary, because again, it's now I'm trying to figure out how many people are enrolled in an accident plan to see how much I get paid to architect a health plan. It just seems it seems a bit backwards, but you know, you got to crawl before you run. So there's always some place to start.

David 17:10

So you don't favor a percentage of savings model.

SPEAKER_01 17:13

No. So the problem with the percentage of savings model is what happens in year two? You're gonna save a lot in year one, and then there is some margin of it's if it evens out, right? And so what do you what's your baseline to compare it to? So that's like going back to value-based care and Medicare payments. And you know, I just I don't know if I agree with paying the advisor broker that because it's so subjective on what to compare the baseline to.

David 17:44

Yeah, there's an awful lot of conversation going on right now about a change from the old commission model when we were literally, in terms of the law, agents and therefore, you know, agents of a particular carrier. And we're now seeing ourselves differently as architects. I'm gonna use that word, I'm gonna swipe that from you because I love that. That's exactly what a lot of us do, and that that's very important. Elaine, what have you seen change in the last couple of years that gives you hope that where maybe some parts of the industry are starting to move in the right directions?

SPEAKER_01 18:14

Yeah, absolutely. I think Marshall Allen's work and never pay the first bill is a great move in the marketplace to shed light that you're not alone when you get a healthcare bill that's outrageous, and that there's tools available for you to help it. That's probably the thing that gives me the most hope for people. Another one is, you know, just the number of employers, larger employers too, who have folks all across the nation who are starting to hear other employers talk. And, you know, building this relationship between people who run benefits at different companies, I think is incredibly important so that the word gets out that there are other ways to pay for healthcare other than these carrier plans. Because I'll tell you the opposite of what demoralizes me is when I go, I'm a numbers gal, and when I go look at the stats, you know, we might move a 7,000 life group to one of these plans, and that's amazing for us. And then we go look in Texas, and you know, of the 14 million folks on a health plan, 4 million of them or more on, you know, the the biggest carrier here. And it's just feels daunting. Like, how do you even make a dent? How do you even get health care to be looked at differently? So that's hard for me as a numbers person to understand exactly how this small scale changes turns into large-scale changes across the nation. But at the same time, a lot of my career has been spent thinking about big scale and strategy and top-down and boardrooms. And I'll tell you, I've never felt more like I'm making an actual change in healthcare until I became an advisor and started working on the employer side.

David 19:59

That's awesome. Well, that's where the rubber meets the road, you know, it as the old commercial used to say.

SPEAKER_01 20:03

Exactly.

David 20:03

We've got about a minute left. I'm curious. You know, the Kaiser Family Foundation study comes out every couple of years and it talks about how abysmal healthcare literacy is among the employees. How can we help to fix that?

SPEAKER_01 20:15

I think people are busy right now. And so to fix it, we need to be available to take their question when they have it. I don't think we can push education. I don't think newsletters, emails, videos, let's not put more information down people's throats. If they want to find it, they will through Instagram, et cetera. But when people do have questions, we need to have a way that they can reach us quickly so that we can answer them.

David 20:39

I think that's great advice. And, you know, it's just, it's sad. You know, I've been at this a long time. And those numbers don't change. It's like, you know, 15%, 17% of folks are actually literate in this. And, you know, maybe that's all ex-advisors who have gone on to do other things. I don't know. But it's a big problem. And I, you know, the reason we wanted to talk to you is because you're a big thinker and because you've had that large-scale experience where a lot of folks who are at ground level never get the opportunity to see that kind of level. And as I said in the open, I think it gives you a very interesting perspective. And we're really grateful to have had yours. And thanks for taking your time and sharing your expertise with the audience.

SPEAKER_01 21:15

Absolutely, David. Well, you know, I do this because I I really truly believe if we can unlock healthcare, we can unlock so much potential. So I'm just excited for the state, our nation to, once we get that healthcare piece unlocked, to see all the potential in people throughout the country.

David 21:32

Elaine Horton, partner at EBC in Austin, Texas. Thanks again, Elaine.

Announcer 21:37

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