Carrier – HealthEZ

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Jason Powers: I’m Jason Powers and I’m joined by my friend, Nick Johnson. What is your title, nowadays? VP of sales and risk and healthEZ. I’m going to call you out, my friend. It is your birthday today. Happy birthday. Appreciate you flying all the way down from Minneapolis.

Nick Johnson: There’s no place I’d rather spend my birthday than in Overland park, Kansas. Or we’re in Lenexa.

Jason Powers: We’re in Lenexa. We’re close though.

Nick Johnson: And every time I come here, it’s a hundred degrees.

Jason Powers: I’ll tell you what, and then you wear a jacket, man. It’s end of September, it’s supposed to be nice and cool.

Nick Johnson: I made it.

Jason Powers: Yes, you did. We are excited to have you here. I’m glad that you made this trip and came down to talk to brokers about healthEZ. This is our Carrier product Update Series. You’ve done this before. I think we did it virtually. I don’t know that we’ve done one in person yet.

Nick Johnson: We didn’t when we were in COVID lockdown a couple of years ago.

Jason Powers: So this one’s a little different, it’s our Q4 Kickoff Summit. And so we’ve got brokers tuned in that want to know about healthEZ. They’ve heard me rave about healthEZ and our experiences with healthEZ over the last few years, and that’s largely due to all the great things you guys were doing out there in Minneapolis. You’re kind of in that space where there’s not a product grid. Well, I don’t want to give away too much, but there’s not a product grid.

Nick Johnson: We’ll get to that later.

Jason Powers: For healthEZ in general, because it’s really a customization product.

Nick Johnson: Yep. So we’re full service TPA, but we really customize everything for the plan. So it’s not a bundled product. We call ourselves unbundled. You can bring in your own PBM, your own network, your own solutions, and sort of customize a plan for the group and members. We’re based out of Minneapolis, Minnesota, been around for 42 years. We actually started as the first PPO in the nation, which is still around, America’s PPO. That’s Minnesota, Wisconsin, and the Dakotas and a little bit of Iowa. But having that background in the network space gives us the ability, and we’ll get to this later, to do some contracting things, direct contracts, local hospital networks.

Jason Powers: And not just customization of benefits, but something that I think that I’ve always found really unique about healthEZ is that you build a custom website for each [inaudible]

Nick Johnson: Yeah, every employer. We have employers down to 10 lives that get a custom website all the way up to 10,000 plus. And we sort of treat everyone the same.

Jason Powers: And that’s all in front of a security wall where everything out there is employer branded. It’s not just healthEZ, this is about customizing that website for the members of that brand to be able to go and pull-

Nick Johnson: Yeah. It’s the group sandbox. They can put banners on there, they can put YouTube video. We basically create a YouTube video that would be host on YouTube, but have it on their landing page for open enrollments, benefits notices. And then we can also put links to ancillary benefits on there as well. So it’s sort of the one stop shop for that group’s benefits.

Jason Powers: Let’s face it, there’s a lot of things that don’t need to be behind a secure portal. That’s really why I think this is smart. It’s smart for employers to have some place where they can send perspective new hires or-

Nick Johnson: That’s the best part about it is it takes the open enrollment work that HR has to do with each new hire and they can just push it off to the website. They can go review their plan information, find a doctor, all of that’s on that pre log in. So you don’t have to be an enrolled member to go access that.

Jason Powers: And as a TPA, something that you guys worked on really, really heavily over the course of the last couple of years, and I think it was launched about this time last year was the new member app.

Nick Johnson: Yes. So it was about a year ago, but it was mobile app. We were not first to the market on it. We wanted to take our time. We put a lot of money into it.

Jason Powers: There we are. There we go.

Nick Johnson: There it is.

Jason Powers: Member app. There we are.

Nick Johnson: So we spent about three years developing and I believe over a million dollars went into the app just because we did a lot of research into other TPAs and health plan apps and looked at reviews and saw what they were missing. And I think we came up with a pretty good option that members, they have loved it. We’ve had great feedback from it. And then November, we’re going to have our cost estimator tool on there as well. So that’s going to be an addition to the app where members will be able to go in and sort of price out the top 500 most common services, which we’re excited about that one. It’s something I haven’t seen done well out there. There’s products that have touted that they can-

Jason Powers: The transparency in health care.

Nick Johnson: Yeah, the transparency and the price shopping. And it hasn’t worked well from what I’ve heard.

Jason Powers: I was talking to a broker yesterday about this next feature, and that is the one simple statement and easy pay. That to me makes so much sense because EOBs are confusing and this is really kind of a one place to see all that.

Nick Johnson: Yeah, so the simple statement, actually, our prior CEO sort of took it from the credit card industry. So you get your Amex bill once a month statement in an email. You don’t actually get bills anymore, you just get it an email, but it summarizes all your transactions. You spent $3,000, here’s what it was on, here’s how much you owe. And this is of what we’re doing for the healthcare industry. You can still have access to your EOBs and you’ll still get them, but just one statement each month, we’ll tell you, “Here’s what you paid. Here’s what you still owe.” And my favorite part about it is it also puts what your health plan paid. So in a self-funded model, most employees have no idea what healthcare actually costs. They just think they pay their premiums. But someone might go to the ER, pay a $250 copay and their employer pays $4,000. This will actually show them and maybe make them think twice next time about, “Maybe I should go with the urgent care versus the ER”

Jason Powers: Right. Well, an EOB might give them that, but most people don’t look at an EOB. But to get that every month and be able to see it just like a credit card system and see what the cumulative effect of their healthcare decisions are for the year, I think it helps with the education and all the things that agents are trying to do from an advocacy perspective. So talk to me about the member experience and what that looks like.

Nick Johnson: The member experience, that’s our core model is servicing the member. So we have the custom website. One other thing we do for each employer is a custom phone number. They’ll get a custom 800 phone number. And we don’t have any phone trees, it’s answered by live human beings in under, I believe, we’re under 45 seconds year to date on average wait time, which in the industry is probably one of the best out there with a live human being. We know who’s calling. So if it’s Legacy Brokers Health Plan, I answer the phone, “Thank you for calling Legacy. How may we serve you?” We know it’s your number. We have your benefits pulled up. So most calls are under two minutes, 99% first call resolution. So that’s what we really pride ourselves on is being able… Because when someone has to call customer service about healthcare, it’s not a good time in their lives. They either owe money, they have to go in for a service, surgery, maybe something like that. And they don’t want to wait on the phone for half a day to get a call back.

Jason Powers: Well, and I can testify that that actually happens in your customer service call center. Those calls are answered live. It pops up on the screen for the customer service rep. I’ve been there, I stood there and watched it happen. I remember the first time I heard that I’m like, “Yeah, whatever. That’s a really good sense. But is it true?” But you invited me up to Minnesota, I saw it happen. And I talk about this a lot and it’s not in your slide deck, it’s not in your value prop, it’s not on your website, but people from Minnesota are genuinely the nicest people I’ve ever met.

Nick Johnson: Minnesota nice. It’s true.

Jason Powers: Yeah. And your service team, the member experience team really is a reflection of that sentiment. You talked about the cost estimator in the app. What differentiates this cost estimator from some of the other transparency tools we see out there? What’s the key difference.

Nick Johnson: It’s going to give you very close estimates on what it’s actually going to cost you. So it’s going to take your deductible and out of pocket into play. Most of them out there right now, you just look it up and it’ll say $12,000 for this surgery, but it doesn’t tell you what you’re going to pay on that. And that’s really what the member cares about, they don’t care what the employer’s paying.

Jason Powers: They’re not shopping for, “Oh, well, if I go here, it’s going to cost my employer less.” I think that’s the key in what it is you guys are bringing to the table.

Nick Johnson: Where I see it going is, I know there’s a lot of movement towards direct contracts with a local hospital or a certain imaging contract, is building that into the cost estimator where if an employee pulls it up and they have to go have an MRI, you can make the deductible out of pocket zero. It’ll show up on there if they go to X, Y, Z imaging center versus the local hospital, it’s going to cost them $1,500 out of pocket. So I think once we start moving more into reference based pricing, direct contracts, building that into the cost estimator tool is going to be pretty cool.

Jason Powers: Well, you brought it up, so direct contracting, we’ll get into some other things and I know we’ll talk about networks, but that’s something I think that’s unique to your setup as a TPA being America’s first PPO. Having credentialing in house, being able to contract in house directly with providers on behalf of health plans and plan sponsors changes the conversation. You’re no longer limited to whatever the PPO contract is to be able to go a step further. It’s what’s missing on the RVP side, it’s missing on the transparency side. On a soft medical plan, getting a large bill into the plan that’s at 900% [inaudible], that’s the PPO discount. It’s one of the things that’s killing healthcare and healthcare [inaudible]

Nick Johnson: I agree.

Jason Powers: I know from our experience, the reporting is amazing. So talk to us about plan analytics.

Nick Johnson: Plan analytics, we have a system called Deerwalk. It’s one of the top healthcare analytics platforms out there, and brokers will have access to that, groups will have access. And this says a hundred plus reports, I’m sure there’s three to 500 reports. So whatever you’re looking for, we’re going to be able to provide that. When you move to a self-funded model, the data is owned by the group. Right now, where most groups are fully insured, even carrier level funded, it’s still the carrier’s data. So you get your one report a month. Maybe you only get reporting at renewal time. But moving to a model unbundled with us, you’re going to have access to that. We can set it up to be delivered on a monthly basis, the Deerwalk reporting.

In addition to that, we also do monthly spec and ag reporting. So a specific large claim report and then your aggregate report, which will show the loss ratio. And then each quarter we do a quarterly report with the group. So we’ll get on the phone, go through how their plan’s running, maybe bring on a member from our care management team to go over large claims. If there’s anything ongoing, what that’s going to look like, how’s it going to impact renewal? So we’re very involved on the data side with the group throughout the year. Because if you move level funded, self funded, you want to make sure that it’s the right move. And the only way to prove that is data. And we’re only going to keep the group if they run well and things look good. So we need to be able to prove that to the employers and brokers that it’s working.

Jason Powers: Yeah. You hit it, the quarterly touch point, I think is vital to, if they’re self-funding or level funded, the employer has a vested interest in knowing what’s going on with their claims dollars, to get the reports is one thing, to understand what that report is telling them is a totally different thing. And your team has always been really good about being available to walk through those analytics and really give some insight as to what is it telling us? What does this really mean? And what does this mean for the future of our plan and the performance? And it’s not automatic. You have to have an engaged employer and an engaged broker that want to take it a step further, but your team is always willing and able to do that. That’s what we like about healthEZ. So now we’re to networks. You’re not a managed care organization. You do have a PPO network, but that’s kind of isolated to direct contracts.

Nick Johnson: Yeah that’s up in Minnesota.

Jason Powers: Up in Minnesota, what are our network options?

Nick Johnson: So currently right now we’re sort of working in four different channels: reference based pricing, regional networks, national networks, and then the last few years we’ve been getting into the tiered administration, and I’ll get to that in a second. But for national networks, we have Cigna and Aetna ASA network. About two years ago now we added Aetna. It’s nice having both options. Previously, we quote against Cigna a lot, if a group was with Cigna, we could not write them with Cigna. So now we have Aetna to be able to compete with a group if there was Cigna or Aetna.

Regional network side, we have access to about 30 different regional networks. And we’re willing to add, if there’s anyone out there who finds another network, we’re willing to add it if it makes sense.

Jason Powers: [inaudible] know you said that?

Nick Johnson: He’s going to love that. But in this area, Missouri side HealthLink, very strong network, regional network. I’m sure most people know about it, a good partner of ours. And then ProviDRs Care here in Kansas, we were on a call with them and they have 99.5% of Blue Cross providers and the discounts are within a couple points. So you can make that up easily on the RX side in a self-funded model or negotiating one claim or steering one number to make up the two points.

Jason Powers: And that’s outside of Johnson and Wyandotte Counties in Kansas, Blue Cross owns the market. And so to have healthEZ with the strength of the ProviDRs Care contract, it really gives some life to brokers who are wanting to go after cases in the state of Kansas. Definitely. And then RBP-

Nick Johnson: RBP is with Payer Compass, and that’s been going great. Dan Meylan, he used to be with Allied National, he’s over at Payer Compass and he’s been great with us, writing some RBP cases. And I know you have a few that have ran pretty smooth. The thing I’m most excited about though is the one on top there, the tiered administration. That’s where I think this self-funded is going to be most successful. And what we mean by tiered administration is just setting up a tiered network. Instead of normally, if you are with Cigna right now, you have in network, out of network. We’re basically putting in a three tier approach where tier one is a local hospital network or a narrow network. Two examples up there is the Health Cooperative of, Missouri, which I’ll talk about and then CoxHealth.

So we have some groups right now that tier one is Cox Health, we have a direct contract with them, and if they go to Cox, it’s lower deductible, lower out of pocket. So it’s incentivizing employees to go to the providers where they’re going to get the best pricing. It’s a steerage for the network. We’re bringing in business that was going elsewhere into their network. So they’re giving us pricing advantages while they’re also getting new revenue in the doors as well. So it’s a win for everybody. And I think it’s a win for brokers as well, because it’s a sticky product. If you put in one of these, we can even protect it and say, no broker can come BOR this. And it’s tough to go try to steal a group and put it with Blue Cross when they already are getting better pricing than Blue Cross. So I’m excited about it, it’s growing, I think there’s going to be some cool things happening on the direct contract side.

Jason Powers: And then that tier two is a regional network.

Nick Johnson: Tier two would be the regional network like HealthLink, and then tier three would be out of network, or you can even put in a reference based pricing out of network wrap. So you’re still covering all the areas, it’s just putting in the first tier to steer members in.

Jason Powers: And we actually have an account, we got a broker out there who wrote an account like this, where we also used a national rap for a travel network. So that works too.

Nick Johnson: Yeah. First Health, Cigna.

Jason Powers: PHCS.

Nick Johnson: PHCS, yeah.

Jason Powers: It just kind of depends on the case and depends on the area that they’re in. And then something that you’ve been working on a lot and we’ve been talking about it, and we can talk about it today?

Nick Johnson: We can talk about it, yes.

Jason Powers: We can talk about today, is the Health Cooperative of Missouri, and I’m really excited about [inaudible]

Nick Johnson: I believe I started working on this four years ago with Dan Meylan when he was at Allied. And he said, “Come on out. We’re going to go over to the Columbia Orthopedic Group.” And Dr. Miles, who’s on the board of Boone Hospital, and him and Jim Tune put this thing together where they we’re losing business to University of Missouri. Everybody’s going to University of Missouri. The local hospitals, Boone, Bothwell, Golden Valley, they were losing market share quickly and they needed to do something about it. And so they started developing this local network called the Health Cooperative of Missouri, where employers can access it at 165% of Medicare and get better pricing than they’re getting with carriers fully insured, even self-funded, and steering members and keeping them local versus going to the University of Missouri. So I’m very excited about it. We’ve started writing some groups in it now. The provider list, I believe is over 500, they’re adding 200 new providers for one one. So it’s really building out, and we basically have the entire state of Missouri, Kansas, and Indiana covered with the HealthLink wrap. So if you do go outside of the Health Cooperative of Missouri, there’s a wrap network there. And then you can put First Health on the back end. If someone travels to Florida, they still have coverage.

Jason Powers: But if they’re in the service area… And then the other way that you steer the network is with the benefits here. I think that’s the piece that gets missed a lot. It’s not like, “Hey, you can use any of the networks.” It’s if you stay in the co-op, it’s a tier one benefit, which is less of a financial burden to the member, less of a financial burden to the plan. But if you want to go outside of that into some of these other wraps, you’re going to have a higher deductible, higher cost share, and it’s going to cost the group [inaudible]

Nick Johnson: And what the hospitals and the co-op want is no deductible, no out of pocket. No copays. It’s free healthcare. And what it does is it takes those hospitals out of the collections business. Because right now, they’re collecting 30 cents on the dollar. This is taking them out of that business and it’s keeping care local and it’s not going to the University.

Jason Powers: And I think we’ve got a heat map of showing the members by county here.

Nick Johnson: Yep. So the green there, the dark green is the current membership.

Jason Powers: In the co-op. So these are providers [inaudible]

Nick Johnson: Providers in the co-op. And then the light green is members in process that will be coming on one one. And  then potential candidates in the blue, that’s where there’s negotiations going on for contracts. And then the red area’s sort of no members right now. But in the red area, HealthLink covers the whole state. So you have…

Jason Powers: You have a wrap.

Nick Johnson: You have a wrap.

Jason Powers: That’s exciting, in particular for brokers that are either in that part of Missouri or have a group in that area.

Nick Johnson: Or if there’s a group that is based in Colorado and they have an office or a plant in Missouri with 50 employees, that could even be 10, we could access the Health Cooperative.

Jason Powers: Yeah, that’s exciting. I almost want to go to the next one, we won’t. We’ll talk about PBMs. I know that’s your favorite thing to talk about?

Nick Johnson: Just don’t make me implement a new one.

Jason Powers: Come on, it’s only fourth quarter, right? You guys have time. But you have a whole slew of customized pharmacy solutions for groups based on whatever [inaudible]

Nick Johnson: Based on size. If we have data, that’s really where we can shine and put together a program that we know is going to work. If they don’t have data and we’re writing it from fully insured, then we have an option like Magellan or [CVS Caremark that we can implement quickly and it has really good discounts so we know that it’s a good option. But what I’ve been excited about is working on these groups that have specialty utilization, where we can put in one of these vendors, PaydHealth, Payer Matrix, or Sharks, and sort carve out that specialty drug and get a deferral for the plan. And then basically all you’re paying is a percent of savings fee. So I know we’ve worked on one where it’s a hundred thousand dollars drug and the group pays $20,000, but they’re still saving $80,000 with that deferral.

Jason Powers: Oh yeah. We’ve seen some significant savings using those overlay programs. And really your guidance at healthEZ, being able to support what it is we’re seeing and giving us those strategic maneuvering capabilities within the plan design speaks to your customization, it speaks to really what you guys are all about.

Nick Johnson: Yeah. And the carriers aren’t doing anything with it because they own the PBM, so why would they carve out a drug from their own PBM when they’re getting paid for it? So I think with all of these products out on the PBM side now, it’s a big advantage for brokers prospecting. You can go into a fully insured group or an All Savers group and carve that one drug out and save the group 30, 40% on their total claims costs and move it away. So if we can get data, that’s where you can really make a difference on the PBM side. And if we don’t have it, we’ll put in one of our integrated PBMs. And then we’ll have the data at renewal and we can always look at implementing one of these overlay vendors.

Jason Powers: So I’ve been excited to talk about this. We’ve been working on it. I’ve been telling people that it’s coming. We’ve got a new small group product with healthEZ.

Nick Johnson: We do. So it’s not custom. Well, it is

Jason Powers: You didn’t change the slide. It’s down to five. I wanted to make sure you didn’t sneak one in on me. Down to five. Custom. So this is [inaudible]

Nick Johnson: So previously, we would only go down to about 15 lives. This one is sort of your cookie… I don’t like calling cookie cutter because we sort of customized it all, but we’re going to be able to go down to five lives. We’ve got eight plans, three MEC plans. So the MEC plans will have guaranteed issue, no underwriting. There’s not stop loss on them. You don’t need stop loss on a MEC plan. Typical loss ratios are three to 10%. But those rates are ready to go, there’s no underwriting on it. Multiple network options, so I’m excited about that. So we’ll have Cigna network, we’ll have the ability to do the Co-op, Cox, local contract, and then HealthLink and ProviDRs Care. So really, we can still customize everything for the group. Really the only thing that’s cookie cutter is the plan designs. So those won’t change, the SPD won’t change, that’s all going to be set.

Jason Powers: Sometimes that’s okay. Sometimes simplicity, especially if you’re talking in a 5, 7, 8 life place.

Nick Johnson: A small group, you do not want to be tweaking benefits, you want it easy. Brokers want it easy. The group wants it easy.

Jason Powers: Here’s the eight options, let me know which one fits you.

Nick Johnson: All groups will have Teladoc. Magellan is going to be the PBM on this one. They’re very flexible. And the reason we have to use Magellan is they implement groups very quick. And in the five to 50 space, someone might make a decision. I’m sure you’ll call me next week and say, “I have a ten one case.” So we have to have Magellan in there.

Jason Powers: What does that say about me, Nick?

Nick Johnson: You’re closing, that’s all it matters. And then a hundred percent surplus. So that’s the thing, it’s competing against the carrier level funded options that keep a third or 50% of the surplus. This is a hundred percent back to the group. And then for underwriting, we’re going to use applications or claims experience if they have it. So if they’re with All Savers, Cigna level funded, Aetna, AFA, we’ll have that claims experience we can underwrite off of that. So we’re really excited about it. Nationwide is our carrier partner. They are very excited about it. They’re getting into the small group space and really excited to start running some business and see how it runs.

Jason Powers: I’m pumped. I’m pumped. For years, I’ve talked about how we’ve seen fewer and fewer products in the market for that audience.

Nick Johnson: Do you have a name for it yet?

Jason Powers: No, not yet.

Nick Johnson: Okay. We’ll think about it. Well, you got me down from when Jason and I first started, I told him I wouldn’t go below 25 lives. And then I think we wrote a case with 23, then 19, then 17, then 12.

Jason Powers: Now we got it down to five. I’ve been working them. There’s a few brokers out there who know [inaudible]

Nick Johnson: Five pending Nationwide’s approval. They could come back and say eight or 10. But I think we’ll be good with five.

Jason Powers: At this point, we’re a five. All right. So then from an incentive perspective for brokers, what do we have in store for that?

Nick Johnson: Costa Rica.

Jason Powers: Costa Rica?

Nick Johnson: Yeah. So five days, four nights in Costa Rica, the Western coast of Costa Rica. To qualify, 250 employee lives. So not members, employees enrolled, 250 by January 1st. And that could be one group, it could be 10 groups. If you get to 250, you and your spouse or a plus one is going on the trip

Jason Powers: And then five lives, that’s a lot of groups.

Nick Johnson: That’s a lot of five life groups. And then for broker offices, we work with some broker offices that have 2, 3, 4 agents, and they came to us and said, “What do we need?” So 600 lives will get three people plus ones to Costa Rica. So we’re excited about it, it’ll be next spring. We don’t have the dates picked out, but probably somewhere spring break, a little after, a little before.

Jason Powers: Nice. All inclusive?

Nick Johnson: Mm-hmm.

Jason Powers: Nice. All right. I’ve never been to Costa Rica.

Nick Johnson: It’s amazing. We went about four years ago.

Jason Powers: Yeah, I keep hearing all about it. So Nick, any parting thoughts for brokers as they head out into Q4 and their busy season?

Nick Johnson: Disrupt.

Jason Powers: Love it.

Nick Johnson: Don’t go with the easy route and renew with fully insured or a carrier model. Look at partial self-funding, level funding with an independent TPA. Because they can do a lot of unique and creative things that are going to keep your clients happy and protect you as the broker. Versus staying status quo, anybody can bring that in there. So who’s ever best buddies with the group usually wins when it’s a case like that. If I was a broker, I would be disrupting with the self-funded model because it’s sticky and it’s tough for groups to leave once you move them and they have success.

Jason Powers: It really is. It really is. I like it. Disrupt. So you heard it from Nick, this Q4, consider going in and being a disruptor. And make sure that you got healthEZ quotes in your bag because we can go down to five now.

Nick Johnson: Yeah. Can’t wait.

Jason Powers: Yep. So that’s it for healthEZ today. Thank you for tuning in. And you guys go out and have a great prosperous Q4. We’ll see you next time.

Nick Johnson: Thanks, everyone.

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UnitedHealthcare offers benefit solutions for groups as small as 2 employees using the largest proprietary provider network in the United States. Their self-funded option, All Savers, gives 2/3 of any claims surplus back to the group. Plus, they offer competitive ancillary options like dental, vision, life and disability coverage.