Framing The Big Question

David 0:01

What if the real opportunity for benefit advisors over the next decade isn't just helping employers buy insurance, but helping them fundamentally manage healthcare risk the way they manage any other business cost? We'll find out on this episode of Shift Shapers.

Announcer 0:19

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers Podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry's shift. And now, here's your host, David Saltzman.

David 0:39

And to help us answer that question, we've invited Carl Schusler, who is managing principal at Mitigate Partners. Carl works with employers and advisors who are looking for more advanced ways to understand and manage healthcare risk to help organizations go beyond traditional methods and think more strategically about cost drivers, risk exposure, and long-term sustainability. His focus is on assisting advisors and employers in using better data, smarter risk strategies, and more innovative structures to increase transparency and control their healthcare spend. Welcome back to the podcast, Carl.

SPEAKER_04 1:10

Hey, Dave, it's great to be here. Appreciate you having me.

How The Advisor Role Is Changing

David 1:13

It's always our pleasure. We always have great conversations. So let's let's start at the at the big at the big picture, as they say. How is the role of benefit advisors changing as employers demand more accountability for healthcare spending?

SPEAKER_04 1:27

I think they have to be more knowledgeable, David. I think they have got to delve into what we call employer-built health plans. And those are plans built for the employer that are actively managed with the advisor and the employer together and trying to build more efficient plans that improve clinical outcomes and financial outcomes for everyone. I think that's probably to me the biggest difference, and that they're obviously having to act more as a fiduciary, and which is we've been doing for a long time. That's nothing new for us.

David 2:04

So let's talk about the employers for a second. A lot of employers feel obviously like healthcare costs are uncontrollable. And, you know, that leads to a lot, especially for CFOs, that leads to a lot of worry about margin compression and such. They'd like more predictability. What's the first mindset shift that an advisor has to do to encourage a company if they want to start managing their healthcare more strategically, as we've been talking about?

SPEAKER_04 2:30

Well, that's an interesting question, David. I I can tell you for many years, I made the mistake of assuming that saving money was their number one objective. And I, as you like to say, I I was obviously on mute some of those meetings that I would come in and show up and throw up and get all excited about how much money we could save them. And that really wasn't what they cared about. And so we really started talking about a health plan mission. Um, it like they have a mission statement for their company. What is your health plan mission? And they generally look at you with a blank stare and then work through that together to really come up and formulate a mission statement and then kind of tailor our message around that. And um, I think the EBITDA discussion, as you know, what that is, that that's a good discussion. But again, you really have to know who you're speaking to and making sure you're pulling the right the right strings that you know will get them excited and and and and concerned to maybe make a change.

David 3:33

You know, we we hear oftentimes the phrase data-driven benefits. So in practical terms, what kinds of data should advisors be paying attention to? And more importantly, maybe what are the what do you think they're overlooking today?

SPEAKER_04 3:48

Well, I th you can look at the cost drivers and a health plan cost, and I would tell you that, you know, you look at things like musculoskeletal. So when you reference or ask about data sources and things to focus on data-driven analytics, I would tell you that musculoskeletal is a pretty easy, low-hanging fruit. It's 20% of a spend. So you kind of look at what's going on there, isolate those claims out. We have some partners that we work with to help us do that that are uh cost containment partners. You know, you've got the pharmacy spend. Um, you're you can look at the efficacy of some of these medications. Many times things are on the formulary that really have no efficacy and no real success, but people keep them on there because no one's paying attention. And then I think, you know, again, I could go to imaging, which is 10% of a plan cost. You know, I could break it down accordingly with you, so forth. And then you're looking at 60% or 70% of a plan spend is at facilities. You know, and and so those are the particular areas that we will try and drill down as much as we can. And there's other little areas that, you know, make up a part, and it just really depends. But uh that's probably one of the biggest, and then of course the the medical billing errors that are prevalent and so many of these self-funded plans with the cartel, you know, as I like to call it, the blue United Signet, and uh also with with other particular independent TPAs, you just have to really look at that.

David 5:21

Have you started talking with your clients about stuff like precision medicine and pharmacogenomic testing, or is we a little bit ahead of the game there?

SPEAKER_04 5:30

You know, to if if I was being honest with you, do you you want me to be honest today? We appreciate honesty. I I I hope that I hope I'm uh I'm viewed as honest, but we have not done a ton with that. Um we have done a little bit of that when we end up with a cancer diagnosis, for example, a breast cancer. We might do the oncotype DX test, which will show whether radiation and chemo is going to have a good a positive or negative effect on a on a on a person. And so that can save the employer a lot of money, but more importantly, it can save that employee's life where they can actually not taste metal the rest of their life. So, you know, it's a$2,500 test generally. So we've done those. So that type of I kind of consider pharmacogenomics, but we don't, I would we are not doing as much as we could in that area. And the cost has come down, David. It's just so many, uh there's so many things we're looking at. And I think that's something as you get established with an uh employer, I think that's a something that definitely need to we need to spend more time on.

Lower Test Costs And Adoption

David 6:34

You know, I was talking with um Lena Chahorsky from Alva 10 the other day, and she knows kind of all this stuff, and she's a great resource. And she she she said something that shocked me, she said most of those tests have now come down to 300 bucks. Right. So it do you think that price on those tests was kind of a barrier for employers and maybe once they once they're out of the stratosphere that more folks will do them as a matter of course?

The Blind Spot: Insurer-Built Plans

SPEAKER_04 6:57

I do, and I think it the biggest part of that, and I know Lena as well, and we've talked before. We she and I have been on stage together before, and I think uh with what she's doing is phenomenal that what they're doing at Alpha 10. I I believe that we've got to make it easier for the employers to get their employees engaged in it and the legalities around those components and how you do that. So I think the ease of that and how easy you make it is really the most critical thing. I think the dollar, David, you you're looking at if you got 300 employees, you that could be a good bit of money, but what's the downstream effect? And it's the ability of the advisor, in my opinion, that has to be forthright and convicted in that recommendation and to really stand their ground because a lot of people will present it as kind of, hey, we could do this, but it's going to cost you that. And immediately the employer says no. So I think we have to talk about the importance of it and be able to give examples like Lena can of where someone took a medication they should have never taken and spent all this money and it had no effect on their outcome of whatever the that they were being treated for.

David 8:09

I think we'll start seeing more of it as time goes on. So, question where do you see the biggest blind spots in in how employers are currently purchasing or managing their healthcare benefits? Aaron Powell That one's pretty easy.

SPEAKER_04 8:22

I think so many of them are relying on the cartel for their for their plans. You know, the, as we said, Blue United, Signet Etna, and they're relying on them to manage their plans. And that's what we look at as we call passively managed because they're letting the insurance company manage their risk. Those are insurer bill plans. So that's the biggest blind spot, I think, is that as you know, we've had many discussions in the past. I bet 9.9 out of 10 people you meet, employers, are working with a cartel insurer bill plan.

Self-Funding Fears And Truths

David 8:56

Is is is there still that fear of self-funding that, you know, I mean, a lot of brokers have been selling against self-funding so long, and now it's kind of a whole different ballgame. Is that something they're trying to overcome? I mean, we're seeing a lot more play in self-funding, even groups that would you and I would never have imagined 15 years ago, you know, small groups are are self-funding. Is that the barrier?

SPEAKER_03 9:23

I think the barrier more than anything is the advisor.

From Vendor To Strategic Advisor

SPEAKER_04 9:29

I think that's the biggest issue at hand. What we try to do, David, I think is important when you do present self-funding, is you have to show the employer their worst case scenario and then talk about maybe a best case, but know this is what you're going to be on the hook for in the worst case scenario. And you have to be able to show that and then compare it to could be a fully insured or compare it to others, and then show, hey, if you decide instead of crawling and walking and you really want to fly and pull the rip the band-aid off and do a truly employer-built plan, like our fair cost health plan, we use a lot, whatever, any of those high performance plans that advisors are putting together, you show them what that looks like. And when they look at flying and they look at the dollars, and then you have to also be honest and talk about the challenges that you're going to face because none of this stuff is easy. And we always say healthcare is a mess. I've been on many calls with other advisors and helping them with a prospect. And they'll always text me, why are you trying to talk the employer out of doing this? And I said, I'm not. I want them to know how difficult it is. And we had one client that did revert back with to a traditional level-funded plan with a carrier. And they said, the one thing you told us is you were honest. You never lied, and you said it was going to be very difficult, and we really appreciated that. So I think that's what you have to do. I think you have to show the upside on the financial side and the downside here. And not every company is ready, and that's okay. Then you build a strategy, crawl, walk, run, fly from that point forward.

What Employer-Built Plans Mean

David 11:09

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SPEAKER_04 12:53

They they need to be able to talk, an advisor needs to be able to talk to an employer about the different strategies in tackling these rising health care costs, David. I think they have to be able to have the discussion across all fronts, you know, traditional insurer-built plans to what employer-built health plans look like. And they just have to be able to have a discussion and objectively discuss it and try to meet the employer where they are.

David 13:20

I mean, I I love that title, employer-built health care plans. Can you expand on that a little bit and how you approach a client when you first start talking about that and the benefits of it? Sure.

SPEAKER_04 13:31

And I I'll ask you this question too. I know we talk. We're always trying to simplify our message. And uh a good friend of mine, uh Barry Broom, uh down in South Georgia, is really the one. It was we form Mitigate Partners that had sort of kind of coined that phrase, employer-built health plans. How do we how do we call what we've built and done to make it simple as compared to an insurer-built plan? So what it is, is a plan built for the employer where they can have health insurance on their terms their way, versus an insurance company delivering it and they're just buying whatever's given to them. We truly architect this from the ground up and helping them build their plan, the components, the cost containment solutions. You mentioned pharmacogenomics, whatever it is, think about a health plan like a house, and each brick in the house is a cost containment risk mitigation solution to improve clinical outcomes and uh and financial outcomes for everyone.

Lead With Options And Honesty

David 14:32

So when you start talking to an employer who's been with one of the BUCAs, one of the cartel, as you call them, um, and it was nice that Humana dropped out because it it's still pronounced BUCA. So, you know, there you go. Um, but when you start talking to them, do you take kind of a uh an approach like the same way you get in a swimming pool, right? Toes go in first. Do you try to start like small and then over a couple of years have a strategy that you build on, or do you just go full tilt boogie with a with a complete plan? Well, you know me well enough.

SPEAKER_04 15:03

Uh I I think I've been over this a bunch of times and we when we get amongst our Mitigate partners and our Zoom bi-weekly Zoom meetings, and I've and there have been many a times where where an advisor has shared, we always have a success period, and they share a success. Hey, I just won this 300 life case. Well, talk about what did you do? And oftentimes, well, we kept them with Blue Cross because that's what they wanted to do. And I often say, did you ever show them what an employer-built health plan looks like, what flying looks like, and then let them make that decision? And oftentimes, well, it just wasn't right for them. And I've always said, how did you get, you know, a call to play God here? I mean, our job is to be an advisor and lead. Our job is to show them their options and show them again the good and the bad with what a ripping the band-aid off, as you said, jumping into the pool head first with cinder blocks on, you know. We have to show them that. And I think that's our job to show it. And I think a lot of people, if they win the deal or however they win it, they get a buyer in pain who's going to fire their broker anyway. I don't think they are willing to do that and show that. But every time we have shown that, every time that I can recall, that employer has jumped in the deep end with sender blocks on with knowing the risk, the difficulty, and so forth.

David 16:36

There's a bunch of brokers that I know who have worried over the years that self-funding is too complicated, that it's extremely time consuming. How can they start approaching this method of solving their clients' problems without it eating their time alive?

SPEAKER_04 16:53

I think education sessions with the employer and getting them to agree to go through a series of education sessions with you. And if they won't, then they're not a prospect for this. But they have to understand, David, and there's, you know, David, maybe I'm sure you've got a way as good as you are with your words. You can't eat an elephant in one sitting. At least I can't. And I talk too dead gum slow as it is. So no one can sit through that. So I think 30-minute digestible bites is a way to educate them, but they have to be willing to understand that. And they also have to be willing to understand that the whole way a fully insured plan works or insure-built plan works, it's the same as a self-funded plan. The difference is you have a little bit of risk. But when you have stop loss and everything else and you put in cost containment solutions, if they know they're going to spend this much in an in a fully insured plan and they're going to spend this much here, I don't know what the risk is. Because you have them reserve appropriately, you help them actually on how to do that. And so I don't think it's that difficult, but you have to have that discussion. They have to understand that it is different. I mean, it's certainly different.

Phased Ramps And Early Wins

David 18:10

Well, you know, it's interesting because all the same elements are there. I'm talking like an old TPA, which is, you know, what I used to be, but all the elements are the same. You've still got a network, you've still got somebody paying claims, you've still got this, that, the next thing, all the all those pieces, you're just kind of deconstructing it so that they can see all the critters that are running in between those little layers. And all of those critters are taking a little slice of money. And by the time you add all that up, it's a big slice of money. And and it it's tough. I mean, it it's it's just a I think you're right. It's a long-term conversation. And you have to start teeing clients up. Do you find with some of your clients that that it's a, okay, well, we want to do this, but we want to learn more. We don't want to do it this year. So let's build a ramp so that we can do it at next renewal.

SPEAKER_04 18:58

Yes, I I think that's a great strategy. And we've we had one not too long ago that that's what we did. We got started, David, got hired too late in the process, could have pulled it off because we've been able to build, we built this, you know, sustainable fair cost health plan. That's what we were looking at for them. And the savings was astronomical, so about$3 million over a five-year period for 177 lives. And we just decided, knowing the client, that, you know, again, hey, we got started too late. This is here. Let's look at this next year. But let's start in the first quarter putting in a solution that we can bolt on, like a nurse navigation concierge service. Maybe in quarter two, look at some pharmacy strategies. And they were with Cigna and ExpressScripts. So we put in some alternative pharma strategies that went outside the plan. So the employer had to reimburse outside of Cigna because you know that wouldn't work with the express scripts in that game. And we put in a couple of solutions like that. And then we had some certain, like a, you know, Dr. Keith Smith Surgery Center of Oklahoma option in this part of the country that we also put out there at a zero cost for the member to go there and have a procedure. So we did do that over the course of that year. And then come October, November, went and got new stop loss numbers, got all the financials, and the savings now is like four and a half million over five years. And for 177 people, David, it's it's truly unbelievable the fat that's in that current system. And so we were able to do that and start it, you know, uh one, one of 26 is when we started on that.

Expect Bumps Then Better Value

David 20:37

I mean, plus you you get a chance to start aligning incentives, you get a chance to do actually more for your employees than you've maybe been able to do, and you get that predictability. So it it it's kind of like I like your approach. It's kind of like giving them a learner's permit for the first year, and they kind of get used to driving the car, and you know, they don't they don't get so herky jerky with it. And by the time that next renewal comes around, they're pretty competent and they're confident as well. And it must make the transition a lot easier.

One Step To Evolve Your Practice

SPEAKER_04 21:05

I think so. And I think one of the things you made a great point when you said earlier about, hey, the self-fund is the same as fully insured or an insurer-built plan with the with a cartel. It is the components. I think I know a term you've used before and I have as well, is it's like a bundled plan versus an unbundled plan. We're just unbundling the components where you can actually see what they cost and then building it from there. And I think the other part that's really important, David, and and it's happened in all these cases, is you get any of our clients and ask them, because they've we've been on stage with them numerous times over the years, and they go, Carl, what do you want us to say? I said, I want you to be honest. I don't don't say anything. I'm not I'm not putting words in your mouth. I want you to tell the truth. And and they'll always say the first six months is tough. And it's gonna be tough. And when you pull that bucka veil back and you see what goes on in an episode of care and the way we do it on our Integrated coordinated care board where all the cost containment partners communicate to take care of the member, it's unbelievable. And I think most employers just have no idea because they've got that, you know, blue cross logo in their wallet, and that's all that matters. But behind the scenes, there's a lot going on that the member, the patient, whatever you want to call the employee, don't know. So I think talking about pulling that Buka Vale back and revealing it and then letting them know that it's going to be a rough six months. Think about going down your driveway, David, with a speed bump one centimeter apart. I mean, it's going to be bumpy. But the one question that's been asked of many of our clients, if you had it to do over again, what would you do differently? And the overwhelming response is always, we wish we had done this years ago. But it's going to be hard and you've got to be honest with the employers. And you cannot, you can't try to be some smooth talking salesperson and pull the wool out. You've got to let them know how hard it's going to be, because it's going to be difficult. And it's going to be difficult for those members. But the other part, David, is I do think important, sorry, is if the employer will let you talk in advance before they ever make changes to any of the people and any of the employees in key decision-making roles, most of them are going to buy in all day long if they know their premiums are not going to keep going up, their benefits are not going to keep getting worse, and they're going to have richer benefits for half the cost. They generally are all about it. So you've got to get that buy-in all together in that process, I guess, is people, the buzzword is change management.

David 23:35

Well, and you know, people, people like change, they just don't like to be changed. And that's, you know, an awful lot of what's been going on with fully insured plans is, you know, they end up settling for what my friend Mark calls the least worst renewal. And they they don't have any control. So a couple of last questions. For advisors who maybe want to evolve their practice, what's one step they could take this year to begin building a more strategic role with their clients?

SPEAKER_04 24:01

If they're just walking, kind of crawling or just in the crib at this moment, they should look at some of the different advisor groups out there that I think are doing a really good job in that realm. You know, you've got um, you know, Health Rosetta, you've got uh Mitigate Partners, which, you know, I'm co-founder of, and and and and you've got, I guess, NextGen, Q4i, there's there's others I'm leaving off, no disrespect to anybody. But I think those organizations, David, have got a lot of brain power and they can share, you know, how to do this. Um, I think they have to look at that or talk to someone that they can get mentored by or learn from. And I will tell you the other thing that I think is the biggest thing. The brokers in general, as my friend Rich Haney, Mitigate partner out in Austin, Texas, says, a broker makes you broker. You don't want to be a broker, you want to be an advisor. And I think it's really important that so many of these brokers' mentality, and I've been involved before, where you help one of them win a client, and then they ask me if I can reduce my fee. And I just sit there and scratch my head, you know. So most of them are fairly greedy, unfortunately, and it's all about how much revenue am I going to get. But the best tuition for learning, David, is to do joint work or joint venture with an advisor that's been there. You will learn so much with your feet in the fire versus trying to be a student. You will learn a ton, and the at least the way I work, I will give you everything. I will educate you every step of the way. You want to be involved in the whole process, we will help. And I think that's what we do a really good job at Mitigate Partners of. There's so many good advisors that can mentor and help, many advisors.

David 25:47

So, last question. Looking ahead five years, what do you think most successful benefits advisors will be doing differently than the average broker is doing today?

SPEAKER_04 25:56

They'll have to be a part viewed as a part of the executive team of the employer. They have to be a strategic partner and they're have to be involved in the financial discussions. That has to be done at the CFO level, in my opinion. This falls under the CFO. It's a risk management financial decision. So I think they have to be willing and have to be able to have financial discussions as much as anything, because that's what this is.

Closing And Thanks

David 26:22

It's not insurance, it's risk management and financial discussions. And that's a great place to end our conversation for today. Carl Schusler, managing principal at Mitigate Partners. Carl, it's always a pleasure to have you on the podcast. Come back soon.

SPEAKER_04 26:36

David, thanks so much for your time. Enjoyed it and appreciate you having us on.

Announcer 26:41

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