Ensuring care management that will benefit both employers and employees
Welcome to the Outcomes Rocket podcast where we inspire collaborative thinking improved outcomes and business success with today’s most successful and inspiring healthcare leaders and influencers. And now your host, Saul Marquez.
: And welcome back to the podcast, Saul here and I have a special guest for you. Her name is Allison De Paoli. She’s the Founder of De Paoli Professional Services where they help employers add control and predictability to their employee benefits. And we know this is probably one of the single largest line items outside of labor and employers spend. So it’s important. She’s one of the few who knows how to manage your benefits budget to reduce health care costs which will drive emeraude to your bottom line. Successfully challenging the benefits and health care status quo is what she does. She’s a contributing author of a new book called Breaking Through the Status Quo, how innovative companies are changing the benefits game to help their employees and boosting their bottom line. She’s a veteran of the insurance and benefits industry and she’s going to cover all the things healthcare and benefits that you’re going to want to hear as an employer but also as a provider. So without further ado Allison welcome.
: Thanks for having me. Pleasure to be with you today.
: It’s a pleasure to have you on. Now did I leave anything out in your intro that you want to cover with the listeners?
: No I think you’ve got it all.
: Awesome. Well how about this. Why did you decide to get into the health care sector?
: So I’ve been in the benefits world for way longer than I like to admit. My family owned a boutique benefits firm and we did a lot of, we helped middle market which sort of as an industry is of our group of employers about 100 to 5,000 lives and we did a lot to help them control their costs. And that kind of provide good benefits control their costs use a benefits plan how it should be used as a recruiting and retention tool to drive employee engagement and morale and to help employees. And I moved to Texas about 20 years ago, went into another part of the industry and as the years went on I started seeing things happening and I just thought well no that shouldn’t be that way. And why are we doing it this way and we can do this thing now and generally just decided that I had to do something about it. The increase in health care costs is killing businesses it’s killing the middle class. Employers offer benefits as a benefit and there are so many employees that are effectively uninsured because they can’t afford their own their part of the cost. It’s not working for anybody and I have some tools to fix it and I think that needs to happen.
: Allison I think you are touching on something that’s very important for a lot of people listening. So within this realm of benefits from the employee as well as the employer perspective, what do you think a hot topic that needs to be on every leader’s agenda today? What is that hot topic and how are you and your organization approaching it?
: I think the number one problem in health insurance today is misaligned incentives. I think there is an incredible distance between the payer of care and the user of care. And if you can shorten that distance you generally eliminate some of the middleman costs and you ensure a better user experience for your employee and a lower cost for yourself.
: Excellent. So so let’s dive a little bit deeper into that. Right. You know a misaligned incentives. Give us an example of how your company and the work that you guys are doing has created results by shortening the distance.
: Sure. So there are a couple of ways that you can shorten the distance. One is by reviewing contracts and making sure that all of as the employer that all of your providers have fiduciary responsibility to you meaning that they owe you they are obligated to you to provide the lowest cost and the best quality at the same time. And let me give you an example and I’m going to pick on everybody’s favorite whipping boy right now which is pharmacy benefit manager.
: Let’s hear.
: We had an experience not too long ago where the TPA brought it to our attention where an employee was taking a generic medication that cost 50 cents a pill it was 50 milligram medication. And that’s fine. And all of a sudden the price just went out of control and it took a little digging to figure out what had happened and what had happened is that the employee needed to increase the dosage and the dosage for the 50 milligram pill was 50 cents and the dose the cost for the hundred milligram dose was ten dollars. Why?
: And why can’t the employee just take two and there’s a couple of things that play here. So one almost never has a physician aware that that the difference in dosage is going to cause that kind of price increase right. How is it that they’re going to be aware of that the employee is not aware of that because their copay has not changed their copay for generic medication is the same. So they’re not aware of it either. But when you pointed out both parties kind of go oh we’ll just take 250 milligram. That’s fine.
: Yeah. Which would be the smart thing to do.
: Exactly. But unless something that comes through your claims you don’t know to be looking at that or asking why. And I think that’s the biggest thing. Why? Why is this this way? Why can’t it be that way? What happened? And then you kind of go back and peel back the layers of the onion and figure out what happened and find a better solution. So fiduciary contracts will help you do that. And that is your pharmacy benefit manager, your TPA, you’re ASO provider if you’ve got one and any other services that you have attached. And I am a huge…
: Believer in care management. It does cost a little bit. Generally it will save you a significant amount of money in two ways. It will provide better care to your employees or make sure that they have access to better care and that they’re following their protocols and generally better care is not the most expensive care.
: I think that’s such a great thing to point out Alison and some very great ideas here. You know typically I think of fiduciary contract and my mind goes to to finance write like a fiduciary adviser. I think a lot of people minds go there. But to think about fiduciary contracts within healthcare I think hey let’s just say it’s kind of like a novel concept that shouldn’t be a novel concept you know. So tell us a little bit more about this. Educate us on fiduciary contracts and how these can be drafted.
: Sure. So I think one of the biggest one of the ways to get the most to head of that is to use independent providers. I work with a number of third party administrators or TPAs that are independently owned and have written already into their contracts that they are transparent in their pricing and transparent in the information that they passed back to the employer. And I think that’s so important, you get full claims detail almost on demand basis and as an employer if you are funding your claims and really even if you’re fully insured you’re funding your claims and everybody else’s. You want to see that you want to have a handle on what’s coming you know with the advent of big data. You can start to track what’s happening in your plan and compare it to what’s happening with you, with your locality and perhaps on a state nationwide level and you can start to tailor initiatives to help educate employees about diabetes. I live in south Texas diabetes and metabolic disease are one of the biggest problems we have here. You can start educating employees and helping them maintain their medication regimens and start eating better and understanding the role that exercise plays in that without a lot of expense and without a lot of drama. And if your pharmacy benefit manager has a fiduciary responsibility to you as the employer not to the insurance company, not to the TPA, not to any other party, then you know that you are paying one the best cost and you’re paying that over time and that the medication is correct. And you know I’ve reviewed some contracts not too long ago where the pharmacy benefit managers’ responsibility was to the TPA not to the employer paying the bill.
: And I’m a little challenged by that.
: Totally and therein lies the misaligned incentive.
: Example. Some great examples here Allison. And as you’ve been working through this you guys have obviously a great amount of experience your family business was into this from a different angle now you’re taking a different spin on it. What’s a time when you had a setback, a big lesson that you learned and now you apply over and over again as a result of what happened?
: So I think that you have to meet people where they are. You know I can talk to an employer and say well we can do this and we can do this and we can do this and we can do this. And I’m a little bit of a nerd. So that’s very appealing and exciting to me and really all an employer may want to know is that “you know what? Can you just take care of my employees and make sure that this cost doesn’t increase at all?”.
: And I’ve had many conversation where I have literally bowled somebody over with enthusiasm for this subject and not met them where they are and totally unnerved them.
: And I think many of us have had that experience before.
: I think it’s such a great call out. And so how do you meet them where they are?
: I ask a few more questions now. I don’t assume that I know what their challenge is. Their challenge may be something different entirely. I mean you know healthcare is a pretty. Health insurance is a pretty broad and diverse subject. Make sure to get to the root of the problem and just take a minute and listen to people and it has helped tremendously. And I’ve helped more employers that way starting that way than by just bowling them over which I think is with somebody who’s engaged in her subject and in the sales arena a pretty common problem.
: Love it. What a great example. And yeah you know we tend to get excited for our ideas and the things that we are sort of knee deep in doesn’t mean that our customers are going to be as excited about it. It’s a great call out there, Allison. What would you say one of your proudest medical leadership experiences has been to date?
: I’ve been asked to lead in my past life as an owning and enrollment firm. Some pretty large enrollments and I’ve been pretty fortunate to be able to pry people away from other opportunities to come work in my enrollments. And that means that I’m providing good work for my enrollers and it also means that I’m providing a quality enrollment experience for both employers and employees. And I think that one thing that employers forget is that employees have budgets too and if you teach them how to use a health plan to their best advantage, almost all of them will do it and that is your first line of defense.
: What a great call out.
: It can yield some pretty significant savings.
: That’s a great call. And today with rising deductible costs I think it’s that more doable. Wouldn’t you agree?
: Absolutely. It is much more important today than it was. You know even five years ago when you had a 250 dollar deductible and a thousand dollars out of pocket max that was not as scary as having a 1,500 or 2,500 or 5,000 dollar deductible and a 6,300 or 6,500 or 13,000 dollar out-of-pocket maximum when 80% of employees have less than a thousand dollars to cover an unexpected expense let alone an unexpected medical expense and the fallout from that is not just that they don’t seek care. They’re often non-compliant with their medication and that will lead to bigger claims down the road. So the sort of oxymoronic thing is that the way to control your cost is actually to deliver care and make sure your employees are getting and using care so you avoid the unexpected spikes.
: So true and you know I was doing an interview Allison with a gentleman from Denmark. And you know we get to know a conversation about taxation and you know that our tax rate is pretty high but university and health care is included and we got the hang of this conversation like hey you know what I mean what is our net tax here in this country. When 66% of bankruptcies are happening because of health care related issues. You said 80% of people don’t have more than a thousand bucks to pay for out-of-pocket stuff. I mean that’s scary.
: That is scary particularly if you’re the employee.
: Right. And then as the employer you know what are you doing. Because when people get into this situation it becomes stressful and you can lose talent. So definitely a very important topic that Allison is approaching with us here today. Allison what about your book. Tell us a little bit about your book. What gems can people find in there? Obviously we only have 30 minutes today but what kind of preview could you give them?
: The book is a collaborative effort of a group of advisers that want to remain relevant and useful to their clients and we’re all independent. We all do things a little bit differently but we all have a common theme and that is we want to help employers offer the best benefits that they can at the best possible price. And there’s a ton of ways to do that. So my take is in there and there’s 28 other takes in there and there are how to manage your self funded plan how to move along the healthcare glide path into further control of your plan. And all the strategies to do that. There are ways to manage short term disability programs so that your employees are getting the best benefit with the least possible tax consequences in the least possible premium. There are ways in there to use enhanced or voluntary benefits to help pad packages and not overburden the employee because that’s a real problem sometimes. There’s tools in there or discussion about how to enter a captive or a coalition, when you should be self funded. What things you can do as a fully insured employer to help control your costs? How to manage an enrollment effectively? How that is really a year long effort and not a two day effort? And if you make it a year long effort the two days will not be nearly as stressful as they typically are. All kinds of statistics about how employees use benefit, how important care management is and helping direct people to the best places for care and best does not necessarily mean the least expensive. It does mean the highest quality and that is normally not the most expensive.
: Awesome. Folks this is like a desk reference that you can have. And bottom line is this you know you hire an accountant to do your books. You hire an attorney to do your contracts. Today’s age if you’re not investing in a professional to help you with your health care benefits you’re leaving money on the table and that’s the bottom line. So the book is Breaking Through the Status Quo. We’ll leave a link to that on the show notes so that you could take a look and buy it for a desk reference for you or whoever’s helping you with these benefits. And if your provider. Something to think about too right. You’ve got to be understanding how to work with employers today. Tell us about an exciting project that you’re working on today Allison?
: Well we’re doing a couple of exciting things but one thing I do want to talk about is direct contracting and how helpful that can be both of a provider a hospital facility or a large physician group as it can be to an employer and we have a couple of systems in San Antonio that have direct contracts with some of the larger employers. And what that looks like is let’s say that a large employer contracts with a particular facility to handle all of their knee surgeries. And that’s just a small specific example.
: What that means is that the facility and the provider and the employer have agreed on a protocol and a cost. And the facility has to meet the requirements of the employer and when an employee needs a knee surgery the price is agreed upon ahead of time the employee goes to the facility has the knee surgery gets all their follow up care physical therapy whatever it is that is part of the protocol, the provider is paid quickly usually just on an invoice without providing any notes or having any sort of negotiation about what was done and what wasn’t done. The employer pays a lower cost for that and may pass some of those savings and often passes those savings onto the employee. So the employee may pay nothing or a much smaller copay rather than their full deductible. So it’s a win for the employee. It’s a win for the employer and it’s a win for the local facility which is probably delivering good care anyway to go direct and receive quick payment and a regular stream of patients.
: I think it’s great to consider these these types of contracts. And you know what the sweet spot Allison gives. You know I hear that the numbers 2,500, 3,000 employee type companies. Are second smaller companies do this with their providers?
: It depends on the TPA. And I think that’s where a well qualified adviser can be so important. Those contracts with the larger employers are managed direct but with midsize employers those contracts can be managed through the third party administrator so that a smaller employer. One hundred eighty two hundred five hundred even down to 50 lives some times can have access to those sorts of benefits. And…
: Got it
: That’s a big difference if you’re going to pay thirty six thousand dollars for a surgery or 75. That’s a lot of money.
: It’s huge. So it’s kind of like a pooling type of mechanism through the TPA.
: So TPA is a third party administrator and they administer your plans so they act sort of like your insurance company. They follow the rules that you’ve established and there’s some pretty standardized sets of rules which you can customize and to make sure that claims are being paid appropriately and in a timely fashion and that the diagnoses are correct and that the service was actually delivered. So all that fiduciary kind of stops and then they provide if they have direct contracts with it they have other cost containment solutions. That all happens in the third party administrators office not the employer because most employers have enough to do. And then when you’re self-insured that claim run just goes to the employer or the employer will review it. They generally review it in a diagnosis and cost containment cost way only not necessarily identifying who the employee is and they then they release the funds. So a TPA can do a lot of things for an employer whereas when you’re fully insured you pay your premium and you hope for the best.
: Got it makes a lot of sense and definitely a valuable review here. Wish we had more time to dive in, Allison maybe we’ll do a part two. We’re going to head into a part of the podcast where we do a lightning round with you. It’s the syllabus on Allison’s De Paoli being amazing at your health care plan. And so I’ve got four questions for you lightning round style Allison followed by a book that you recommend to the listeners. You ready?
: What is the best way to improve your health care outcomes with your insurance?
: Eliminate the misaligned incentives in your plan.
: What’s the biggest mistake or pitfall to avoid?
: Thinking that you are controlling your risk by remaining fully insured. All you are doing is managing the financing of the risk you’re not managing the risk itself which is riskier.
: So good. How do you stay relevant as an organization despite constant change?
: Always be learning.
: What is one area of focus that drives everything in your organization?
: Employees have budgets too.
: Love that. And besides Breaking Through the Status Quo, what book would you recommend listeners?
: I think anything by Malcolm Gladwell. Outliers is one of my favorites. Blink. I think it’s particularly useful in our conversation today, following your gut, and practice practice practice.
: Love that. I am a big fan of Gladwell as well. Check those out folks if you want to access the show notes go to outcomesrocket.health/paoli and you’re gonna find all that there. Allison, this has been a ton of fun. I love our time today. If you can just share a closing thought, and then the best place for the listeners could get in touch with or interact with you.
: Sure it has been a lot of fun today. Thank you. So as a closing thought I would say don’t be afraid of taking on your health plan and you managing it and not it managing you.
: Amen. Love that.
: And to get a hold of me you can go to my website, allisondepaoli.com/rocket. I’ve got an e-book there that people can download if they wish. All the steps the 5 steps that I use to help employers gain control and predictability and there’s some video on there that talks about that as well. Sometimes that’s a little bit easier and I’m happy to answer any questions at any time.
: Outstanding Allison. Hey we appreciate your time and folks take Allison up on that e-book. Go to her website and we’ll provide a link on our show notes as well. outcomesrocket.health/paoli. You’re going to find that. So check out that e-book. Allison it has been a true pleasure. Appreciate you spending time with us.
: Thanks for having me.
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