The Granite List Live

Today, we’re continuing our conversation with Chris Shoffner, CEO of Your Community Health Plan, Adam Russo, CEO of Phia Group, and Rob Gelb, CEO of Valenz discussing the importance of engaging, early and often with your data and how to use predictive analytics to change employee behavior to drive low cost-high quality choices in healthcare decision making.

Here is the full transcript from this episode:

Announcer (00:25):

Welcome to another episode of the granite list Live. Navigating a sea of benefit. Solution is daunting at best and new vendors emerge every week. Hosts Leigh Dill and Sally Pace spring brokers and employers a solid resource when it comes to uncovering what's new what's needed and what is happening now to allow for the best plan design possible. By staying on top of trends, brokers and employers can intern stay on top of spending while improving employee engagement and outcomes. Today, we're continuing our conversation with Chris Shoffner CEO of Your Community Health Plan, Adam Russo, CEO of PHIA group, and Rob Gelb, CEO of Vālenz™ discussing the importance of engaging early and often with your data and how to use predictive analytics to change employee behavior, to drive low-cost quality choices in healthcare decision-making

Rob Gelb (01:25):

It's interesting we come from maybe a different lens or different angle, or I do personally. And then our company kind of does as well. Culture is a conversation we have a lot with customers with business partners, because if you're not aligned culturally, you're not going to, it's not going to work no matter if you have the best products, Adam could be the best at what he does, and we could be the best of what we do. But if culturally, we don't align with the way we make decisions, the way we treat people, how we look at things, it's going to ultimately be an epic fail because something's going to break and then all hell's going to break loose part my English.

Rob Gelb (01:58):

And I feel like when I listened to Adam, part of the challenge we face is the benefit consultant broker community needs to take a step back and really do what they're hired to do, which is understand culturally, how an employer should be looking at health care for their members, healthcare for their employees, how they need to treat their employees. How do they treat their employees? Outside of healthcare is going to be a very clear sign of how they're going to look at health care. Are they going to try and cut benefits? Are they going to try and make sure that they get what they need to be a healthy population? That's delivering a presenteeism to their day every day as an employer.

Rob Gelb (02:29):

So I don't know how you solve for that. Other than one employer opportunity at a time like Adam has done over the past 20 years and the most recent 5 as he points out. But eventually, you get all the participants and all the stakeholders in an individual employer's plan to align culturally about why they'd have to have a why as to why they're putting healthcare, making it available for the employees, how it's going to work and how people are going to access it, get educated. It's what led us to create our concierge Medical or Navigation product, is to start working with the members directly and teaching them what the plan is going to pay for what their plan will and won't allow what a quality provider looks like and where and how you access them. So I'll get off my soapbox, but culture is a key part of what we struggle with to get this universally changed, I think.

Adam Russo (03:20):

A broker or a consultant, they won't get fired if they work with the traditional carriers, right? It's like I said.

Rob Gelb (03:28):

We, we talked about this on, on our webcast, on RBP next-generation right. And one of the things is right as we were doing that, the Wellnet survey had come out. I don't know if you had seen that one, but there were two questions in there. I think they were question 4 and question 30 something. One question was, do the Bupa solve for the needs of your employer, self-insured employers consistently and 85% said No, not at all. 30 questions later. How much business do you place? 85% of them place it with Bupa's. So those two are kind of diametrically opposed. It's illogical to say they don't solve for, but I'm still going to sell them. It doesn't make any sense because there, there's a disconnect. They do. What's easy. And that's, and this is hard stuff.

Leigh Dill (04:11):

How do you change that conversation as a broker, going into an existing client and admitting that your current plan isn't working, it's not solving for our problems. We all know this, but, but how do you start that conversation to, to sway the CFO and the HR department?

Adam Russo (04:26):

So here's the problem. COVID last year, if you did nothing to your plan. Wow, this is so funny thing works. Because people weren't getting treated claim volume down 30 to 40%. People were off steady, their surgeries, right? People were pushing all that off. So, when they walk in to that meeting this year, they say, huh, wow, you guys did a great job. No, that you did it. It's called COVID. It's called no travel. It's called people afraid to go to the hospital. People do not make the doctor's appointments. What people don't realize though, is that when you went to your stop-loss carrier for a quote, the 21, the 2021, what happened? Did they give you a premium discount? No. Premiums went up by an average of 10%, How? Because they're petrified.

Adam Russo (05:17):

All those people that didn't get those screenings for cancer, all those people. Now they started getting on medication for depression, all those people. Now I started drinking more, taking more prescription pills. Think about it. They're petrified of those catastrophic claims that are going to come. People now are starting to get those surgeries. So what they're fearful of is the fourth quarter of this year and 22, those claims volumes and costs going straight up and the behavior of the actual employees has changed. People aren't looking at their drug spend, people are not looking at their out-of-network spend, people not looking at mental health claims, mental health claims right now, boom, skyrocketing. And guess what? Those treatment facilities are not in-network. Those treatment facilities are in Florida and Arizona, all out of network. Yet the plan language hasn't changed. The risk factors have people aren't looking at them and they're just going forward as if nothing happened

Rob Gelb (06:16):

You said it 22. So we've been talking about this and Chris knows this. I said at the end of 2020, when we were talking about a bunch of stuff, I said, 21 is going to be kind of a tough year to think through, because you just don't know when we're going to break open again, and people will start traveling and they will start seeing doctors. But 22 for certain is what I've been terming, the whiplash effect of COVID and that whiplash we're starting to see the stick kind of being pulled back rapidly and move forward. And that whiplash effect is exactly what Adam is saying.

Rob Gelb (06:47):

And if you're not paying attention to your plan design, and you're not paying attention to the trends in your data, and you're not paying attention to what's going on with transparency, laws, and no surprises and how all these providers are going to figure out a way, because just like the member and the plan, the healthcare providers are going like this, now is my moment to make up for all that lost earning I didn't get from all the treatment and all the serious services I didn't provide. And they're going to find a way to get paid. And so get ready. It's common. And you've got to start preparing. You should have been doing it already. You should easily be thinking about your one-on-one now.

Adam Russo (07:22):

But they're not.

Sally Pace (07:24):

Okay. So, that ties into something. And first of all, let me say, we have 10 college interns there from Stanford, Columbia, Notre Dame, all over. They are floored as they are learning about all of this, they are floor. But the one thing they keep saying is we don't understand this brand loyalty. We don't, y'all keep, we've trained to move out with the Bupa's are, and they're like, we don't, we don't get it. We don't understand why your generation cares that much because they're the Amazon shoppers. They're the ones who don't need, they're willing to buy whatever is the highest quality, best price, highest ratings without the name.

Rob Gelb (08:00):

Shameless marketing.

Sally Pace (08:03):

You're here for, I love about the two questions you elaborated on from the recent survey, but I want to go back to data because we put a lot of, and Leigh, you touched on it and Chris you've definitely touched on it too. What a lot of people think about when they hear data is claims data, retrospective claims data. What are the three of you looking at differently? What, and what would you encourage brokers and employers to also be looking at when it, when we use this broad term of data drill-down for us?

Chris Shoffner (08:35):

Well, from my perspective, as fiduciary to the plan, right, is you need to pay the claims data because you got to be able to audit bills and you got to be able to make sure that you're not paying for stuff that you shouldn't be paying for, number one. Number two is then with all this new data that's coming out, right? You've got all the data, you've got paid claims databases. You've got worker's comp paid claims databases, all about the same providers, right? And so how then can you take that? Because giving someone participant, just a network provider list and I have at it, that's not going to the data points that you can find. Right?

Chris Shoffner (09:16):

And my eyes were really opened by Jeff Gasser at Deerwalk way back when, when they were D2 Hawkeye. And he said, Chris, look at all the state that look, would you send your daughter or your cousin or your brother to one of these doctors that are at a hospital. That's less than five miles from you. And if you look at the Medicare data and if you look at the quality rankings and things, you'd go, no, I'm not sending them there at all yet. That's the facility where everybody goes, right? It's that again? Brand loyalty. And why is it? Well, that hospital has got all the business owners in the local community or on their board. They're all doing fundraisers. They're all a part of that.

Chris Shoffner (09:54):

So it's hard to bring that level of transparency and data about quality with a surgeon that might be in your rotary club or in your church. Right. And you're like, Hmm. And you don't obviously you don't put it out there, but those are the data points that are forward-looking. And that's exactly where Rob is. Right. He's already to that point, he's got more data. I think you've got more data than anyone else that I know of. 

 

Rob Gelb (10:26):

We think so. Yeah. Our direct, certainly in our direct competition and Adam, I know you wanted to say something. I,

Adam Russo (10:31):

The only way any of this matters is by incentivizing the employees to care because you can change their behavior. You talk about loyalty brand loyalty. Yes. What we did is if you look at our plan document on page three, right after the table of contents, it literally says, here's how you can make money by saving money for the plan. And what do we do? We give them a percentage of the actual savings by changing what they're doing. So here's a good example, our diapers, the wife's program, okay. The Boston Globe did a front-page story. And the Metro section on our amazing, innovative diapers and wipes program. Think about this. This is not innovative. All we did is we looked at the data and then through predictive analytics, what's going to happen based on the data that you have currently, that has looked back, right. And what we found, not just look at the claims data, but just looking at our population.

Adam Russo (11:28):

A bunch of people were getting married. Our average age was 27 in the office. So what did we see? Huh? People had started having families. So what we said was, how much are we spending for delivering a baby in networks, we have blue cross blue shield at all the network hospitals within our network. Remember the co-pay at the time for our employees for inpatients, they was like $250. So no matter what hospital they went to have that baby $250 is what their cost is and what we found put quality aside for a second, the cost range went from 8,000 deliver that same baby to 60,000 same baby. So what do we do? We identified the lowest cost hospitals at the highest quality metrics and said, you can go to any hospital you want except network.

Adam Russo (12:18):

However, if you choose one of these five We'll pay for my company will pay for your diapers and wipes for your child for two years, 76 children later, 75 of the 76 have gone to one of those facilities deliver that baby we've saved over $750,000 by just doing that. And that was a front-page story. It shouldn't be, this should be basic stuff that everybody does. If you look at your data, predictive analytics, predictive behavior, that it looked at the cost, look at the quality you can change the way fundamentally people behave when it comes to healthcare.

Rob Gelb (12:59):

I'm going to jump on that for 30 seconds and kind of a tag back to where Chris was going. So in the world of our promise of engage early and often, it's tied to this concept that five to 15% of the claims are going to drive 70% of any one years, a one-year plan costs. And so how do you early identify and get in front of so engage early and often to either identify the 5 to 15, we operate under what we call a data-driven clean start, which starts with what we call pre-claim loss. In that pre-claim loss world we're gathering historic paid claim data from the groups that we're talking to the brokers, et cetera. And we're analyzing it for three key things. We're looking at disruption to understand what we can do to change and what we're going to have to do to change behavior to drive into higher quality, lower-cost medical.

Rob Gelb (13:45):

We're going to assess what the overall impact of medical Spin's going to be based on what we would do in that, whether it's contracted and or negotiated discount. And then depending on the quality of the data, which is questionable most days, but on the quality of that data we can do, what's called a Lifestyle Analysis and that's through our predictive analytics and algorithms come into play. We have the five or six key chronic condition, data sets and algorithms that drive that five to 15. And we pre-identify in that population. Those members that we believe are either in or headed towards a high-cost event or a high cost care episode and we start to make recommendations and plans on how you can mitigate and reduce that to get them back under control. So we use data in that fashion and we use it throughout.

Rob Gelb (14:31):

And the reason we operate a proprietary ecosystem of all these services integrated together as time matters to making decisions, speed matters, and data is critically important in decision-making. If you're working with 17 different vendors and waiting for people to populate your warehouse and cleanse it, it could be 14 to 30 days at the time to make a decision and impact prospectively as is lost. We're real-time capturing the data and real-time analyzing it through the algorithms every single day alert action accountability design. So those are all the pieces of data that changed the way you look. And I think that's one of the things that drew Chris, in addition to having this dearth of data paid claim, they charge data, cost, data, transparency, data, quality data, and all everything in between. We use it every day in a way that drives better decision-making and education for the planner, for the member and gives the broker an opportunity to figure out how do you create some Adams point a plan design that route steer incentivize them to do the right thing for them. And the plan

Chris Shoffner (15:29):

That's 700 community pharmacy activists here just in the state of North Carolina and 16,000 across the country. Right? And they are now being excluded from the CVS network. They're being excluded from Express Scripts network. And what they would tell you is they're doing it that because I'm not filling them because I'm doing it at a loss. Right. So when, when I went to them and said, what can we do? They said, well, it starts with generics. Just pay me for the generic med, just reimburse me my costs and then paying me to be in engaged clinically with these patients. Right? And so you say, okay, well, how do we define cost? So when we started your community health plan, we interviewed four PBMs that were referred to me by the North Carolina association of pharmacists. Three of those PBMs walked in the door and said, well, we use an average wholesale price minus the discount, but we're fully transparent and you get all the rebates.

Chris Shoffner (16:33):

And I was like, thanks for coming. We will 10-minute conversations. And they're looking at me like, that's, it I'm like average, wholesale cost. Where's that information coming from, right? You can't pack it it's fiction, right? Just like discounts on your blue cross and blue shield or Cigna rates it's fiction. You can't do that. So they said, well, there's this thing called NADAC N-A-D-A-C. It's the National Average Drug Acquisition Costs. It's a survey-based methodology. It's used in about 38 states for Medicaid. It's out there. It's real data. And those pharmacies agreed. Okay, well, if you just pay us that. So the raw NADAC cost for these 350 drugs that are on our preventative formulary, the most expensive one on a 30 day fill is $2 and 25 cents. And so we said, if it's this cheap, we need to do some repricing.

Chris Shoffner (17:32):

So we went out to employers all over the country and we said, if you've got access, right, if you can get access to your pharmacy claims data, we can reprice it for you. You know how long it took us to find enough employers that even had access to their pharmacy claims. It was unbelievable how difficult that was, but being persistent, if you look at that. So if PAR is a dollar, right, if the industry right now, average wholesale price, minus your discounts, whatever, if that's a dollar NADAC on ingredient costs is only 50 cents. Where's the other 50 cents going, right? It's hidden. You'll never be able to find it, but that was an eye-opening for me to think, generics can be gained 50% in price difference, 17% after we add on. So we pay an $8 dispensing fee, right?

Chris Shoffner (18:37):

And people go, why would you pay that? Most industry only pays 85 cents or $1.25. Well, it's because we want our community pharmacies to act differently. So if the industry has got you in this box that you don't like to be in, but you want to be in a much nicer box where people value your one, people trust their pharmacist more than they trust anybody else in the healthcare continuum. And they are vastly more likely to visit their community pharmacy or their pharmacy more so than they are their doctor. So if you want to talk about grassroots, ground-level disease management, where it matters, the pharmacist has got to be involved. And that's really, our aha moment when it came to pharmacy was the one guy that walked into that meeting and said the word NADAC. And I was like, you got me, tell me what that is. And, and we're in there.

Chris Shoffner (19:34):

Right? And then I went to someone that I really respect in the industry. Gloria Sachdev runs the Indiana Employers Forum. She herself is a pharmacist. Two years ago, I walked up to her and one of her meetings said, Hey, Gloria, how are you doing for tricks? Ad says, Hey, oh, great. You know, Troy? I said, let me ask you, do you know what NADAC as cost for pharmacy is? She didn't know. And that was the second point. I was like, okay. So one of the pharmacist herself leading one of the biggest employers forums in the country, right. Had no idea about this type of methodology and how it can apply in a PBM world. And so I think that's what really solidified our intent on using community pharmacy versus a traditional PBM or this year community health plan. Because if it's smart and I don't have any bad habits to break.

Sally Pace (20:31):

You know, you all have talked about misusing big, good business sense. I mean, that's what it boils down to is treating it like you do every other area of your,

Leigh Dill (20:41):

And I think Rob, you said it best. I mean, I, I feel like the title of his podcast is transparency has be defined, and it did all points of every part of employee benefits. So I hate to stop it, but we are at the top of the hour, if y'all want to go around and just tell us how we can get in contact with you for further questions or exploration, Adam, if we could, if you want to start. And, and your favorite book.

Adam Russo (21:12):

Oh, my favorite book. Yeah. Rob has all these business books. I saw that Rob.

Rob Gelb (21:17):

When you write it, then it'll be my next favorite. But until you're right at the 2 I selected.

Adam Russo (21:22):

I actually, I'm actually writing, I'm writing it. Rob, I'll let you have... It's a, [email protected]. And my direct phone number by cell is the best is 178284325. And I got my favorite book. I'm a big Cleveland Indians fan huge. There's a book called the curse of Rocky, Colorado. And it looks at the 30-year slump of the Indians and how there was a curse basically on the Indians, by a guy named Terry Pluto. It's a great book about just Cleveland sports history, how we always loose basically. So, that's my favorite book. I love it. It's I got brainwashed as a kid to love the Indians. I brainwashed my entire family as well, but it's a great read. Something fun to read over the summer. And now that's it.

Leigh Dill (22:14):

Great, Rob, and we'll enroll. Wrap it up with Chris.

Rob Gelb (22:17):

Thank you. So it's, [email protected], (All one word with a Z for valenze), (215) 692-0973 is the cell phone. That's the best way to get ahold of me of any time, text or voice. And I had listed too. What got you here? Won't get you there by Marshall Goldsmith. And then Phillip Lindsay only does a series of fables business fables. I love all of them, but the first one I read was the five temptations of CEO long before I ever became a CEO. And, and really both books kind of talk about the same thing, the importance of innovation, listening, collaboration, and really just being humble and understanding that, just because you have the big title, you're not necessarily the one that has all the answers and you really need to listen to the people that do the work and take learning from them. So I'm all about self-improvement self-help. My wife is key to making sure that I improve every day and after 31 years, she's put up with me she's kind of shaped me into what she thinks I should be. So both of those books were very, very helpful to me in my career.

Chris Shoffner (23:23):

[email protected] all spelled out at 9193706217. And my book is a business book, but it's an older one and it really did change the way I looked at trying to execute what we're doing today. And that's the innovator's dilemma, though. If you look at innovating in a market, if I'm a big PBM going up against, or a MAMA, infant PBM going up against CVS or Express Scripts or anything, that's going to be a tough nut to crack, right? But if you go to that low, low margin business, for those in those big carriers, there's the small, fully insured groups, the 15 life group, the 25 life group, right? And the brokers that you're dealing with and that level of the market, aren't nearly sophisticated enough to be able to handle self-funding or this type of data talk that we're talking about right now.

Chris Shoffner (24:16):

And so that's really why I focused on these small businesses is that they don't have a board of directors that they've got to go to. They don't have, typically they don't have a CFO. They might have a bookkeeper. They're not going to have an HR staff. They are the ones making the decision. And it's those business people that have to hear the common-sense stories that we're telling them, myself, Rob, Adam, all in the same perspective that they can make the decision to change a lot faster than a thousand life group or a 400 life, city or county government.

Chris Shoffner (24:52):

Any of those businesses are going to struggle with trying to do something new and different and innovative for all the reasons we've talked about. The broker's going to tell them it's a bad idea. The HR person's going to say, it's too much work. The CFO's going to say, well, we got to spend the money anyway. You know, all those things, but this small business owner, when you tell them, Hey, look, this is $250,000. And if you do this the right way, you might only spend $130,000 and your employees are going to get more or less, a hundred percent coverage. They can make that decision. Right?

Leigh Dill (25:26):

Thank you all so much for your time today.

Rob Gelb (25:29):

Thanks to you. This is great, Chris. Thanks for the invite.

Chris Shoffner (25:32):

Thank you both. I appreciate it immensely.

Announcer (25:35):

If you miss the first half of this discussion, please check back to transparency has to be defined part one with Chris, Rob and Adam. Thank you for listening to this episode of the granite list live, access our entire library by visiting your favorite podcast venue or subscribing our site, the granite list.live

Transparency Has to Be Defined