Transcribed from the recording and lightly corrected. It may contain errors; the recording is the record.
00:01Welcome to The Business of Benefits. The Business of Benefits is your no-BS, no-sales guide to real solutions. No gimmicks, just the truth about how to take control, transform your benefits, and care for your most valuable asset, your people. If you're tired of the same old sales pitch and you're ready to rethink your benefits, this podcast is for you. The truth is out there. Are you ready to hear it?
00:01Donovan Ryckis: Hey everybody, welcome back to The Business of Benefits podcast. I am Donovan Ryckis, CEO of Ethos Benefits, former securities advisor turned healthcare advocate, fighter, champion, I don't know, something like that. Today is going to be a little bit different of a show. I actually have Bryan Orr on. He is the president of Kalos Services, which is an HVAC and construction business in Florida. This show was actually something we recorded on his show. He's been running a podcast for seven or eight years. It's called the HVAC School. He, in addition to his business where he actually has clients and services customers throughout Florida, he also trains technicians across the country in the HVAC industry. So, he had me on, this was last year, aired on his show. And the cool thing about it, what I really enjoyed and what people seem to resonate with, is Bryan's actually a client of ours. So, we got to take him through kind of his healthcare journey and guide some of the decisions that Kalos Services was making and partner with them on making some improvements, which is what we do. But what's cool is he's interviewing me on his process, how he experienced it, things his employees went through, and what he found important or what was unique or interesting about the process. So, please listen and enjoy. Ask some questions. Subscribe to the show and let me know what your thoughts are. But without further ado, Bryan Orr from Kalos Services.
01:51Bryan Orr: This is the HVAC School podcast. This is the podcast that helps you remember some things you might have forgotten along the way, as well as sometimes brings up weird topics that you don't expect. But this is not a weird topic. Honestly, this is a topic that affects all of us, that we all have to deal with, and that is healthcare. Healthcare is a real nightmare at times, both in terms of expense and quality of care. Anybody who's had any health issues, or if you have a bunch of kids like I do and you have to use healthcare every once in a while, you know how challenging it could be. And today I have Donovan Ryckis on. Donovan is the CEO of Ethos Benefits, and Ethos Benefits is a company that we work with at Kalos. Again, this is not a sponsored podcast. This is nothing other than just an experience that we've had with them, and I've learned a lot from them about healthcare, and it's the sort of thing that I want more of you to know about, because I think it will help you. It's information that just will be universally useful to you, to understand how the healthcare system works and some of the ways that you can potentially bypass some of that and make your life hopefully better, as I feel like we have.
02:46Bryan Orr: So, just to give you some stats right off the bat here, some things that we've saved. So, employees at Kalos pay 58% less towards their insurance premiums compared to benchmarks of other employers in the southern US. Kalos employees have an average deductible that's more than $700 less than the benchmark. Zero copays, mental health counseling, diagnostic medical imaging, and mail order pharmacy. Direct primary care membership is included for employees independent, offering same day or next day appointments. Yes, I am reading off a list of the things that he showed me based on our plan. And our plan costs 40% less on a per year basis than the national benchmark, meaning it costs less for employees and it costs less for us as an employer. And that's because we're betting on ourselves. That's because we're focused on a plan where we're really footing the bill for the care that's being provided. But in that, we're also negotiating a lot better and getting better healthcare outcomes. We have many, many examples of that. It's not always easy, but it has been worth it. And we have had a lot of really good things come of that. So, I just want to introduce you to Donovan. Donovan's a great guy. His wife Chelsea, I've known her a long time, back to the days when I used to help a local softball organization with their marketing. Well, I've been doing weird things for a long time, but anyway, so I've known them for a while and I've seen their business grow, and this truly is educational. I think you're going to learn some things that maybe you didn't know, maybe some things you forgot to know in the first place. So, here we go. Donovan Ryckis and I talking about the healthcare problem. Thanks for joining us today on the HVAC School podcast, Donovan.
04:08Donovan Ryckis: Hey, Bryan. Thanks for having me.
04:34Bryan Orr: Yeah. So, this has been one that I've wanted to do for a while. Definitely a topic that I think a lot of the folks for HVAC School are going to be like, why are we doing this? What is this all about? But I think if you listen through, this is something that literally everybody who lives in the US should know more about and will be happy that they do know more about. So, stick with us here as we work through this. But the first thing I wanted to do, Donovan, is just let you introduce yourself. Tell us a little bit about your story and how you got into this and obsessed in this particular topic.
05:01Donovan Ryckis: Thanks. So, Donovan Ryckis. I am the CEO and founder of Ethos Benefits, and I work with my wife Chelsea Ryckis, and Ethos Benefits is basically a benefits consultancy for large businesses, midsize businesses, to help work with them on their healthcare problem, which it's just really a matter of how big is our healthcare problem. Every business in this country has a healthcare problem, and that's what we strive to do.
05:29Bryan Orr: Yeah. Awesome. So tell me a little bit about how you got here to where you are today, because it was a little bit of a winding road.
05:29Donovan Ryckis: Yeah, a little bit different of a path than I think most people. So our agency was actually a registered investment advisory. So I was a financial adviser, and in that I was a fiduciary financial adviser, which is a great and important distinction, because that's something you can do when you are looking for financial advice. You can hire a fiduciary. So the three principles of fiduciary is always acting in your client's best interests, being 100% transparent, and have no conflicts of interest with your compensation. So those are the three things. No conflicts, transparency, acting in best interest. And in that we started to work with businesses, and mainly on their defined benefit and defined contributions. So 401k and pension plans. And I'd strive to help out a company and maybe lower their expense ratios 25 basis points, which is a quarter of 1%, which is good work. Over 10 years or 15 years or 20 years, that's a ton of money if you're contributing to a 401k. But accidentally one day a client asked us to help their healthcare problem. He said, hey, I got a 40% increase. The broker is saying this is it. Can you help? And I said yes. I don't know why. I'd never sold health insurance before. I knew nothing about it. I just figured I'd try to help my client out, and there wasn't much to lose on my part. I'd just do a little research. So, I spent a couple weeks basically making as many connections as I could in this space and getting people to help me out. We ended up structuring a health plan where we didn't increase deductibles. We didn't put the employees in a smaller network. We didn't even change the plan design, and we're able to save him that 40% entirely. From that point on, I realized, wait a minute, his publicly traded broker was saying this was it, 40%, you have to pay it. You have to pass that on to all the employees. I came in not knowing anything, not wanting to know anything, and was able to fix it. And it wasn't because I was brilliant. It was simply because of the way the conflicts of interest and the compensation work in healthcare inherently. And that woke me up to realize, hey, I'm working on the wrong side, because it's all employee dollars. Whether they're contributing their 401k or they're contributing their healthcare, it's all employee dollars. And I realized my time was much better served on the healthcare side than the 401k side.
07:21Bryan Orr: Great stuff. And that's actually how a lot of the things that I think a lot of companies find themselves doing. It's like you find a problem and it's like you can't help but try to solve it. Then there's this fundamental issue. So talk about that fundamental issue. What drives it? Because you identified it. You identified that, man, there's an issue here. And I think your experience acting as a fiduciary on the financial planning side also made you realize, man, there's definitely some fiduciary responsibility, meaning acting in the client's best interest, that is not happening in healthcare.
08:16Donovan Ryckis: It's pretty gross, isn't it? Because I'd seen it happen in financial advice my entire career, where people would get this recommendation over another one maybe because that has a 5% upfront commission or something like that. That kind of stuff you see, and that's gross. But then to think that somebody could do that for hundreds of employees based on their own personal compensation, to me that's the foundation, and I didn't understand why is that such a foreign concept, that when we're acting on the behalf of more people, that there is no legal requirement, which is what it was in financial advice. There's no legal requirement or responsibility for anybody to act in the best interest. So the employer is left out there alone. They don't understand the problem. They don't have time to do it. They're doing something else, and they bear all the responsibility in making those decisions. So for me, I think it really just, if I wanted to fix this industry, I would start out with the financial incentives and the fiduciary requirement. I think that should be a requirement in order to consult in healthcare and part of the insurance license, period. You take that out of the way and some bonuses and perverse incentives, I think the right advice starts to come out after that.
09:10Bryan Orr: Obviously, there's a lot of folks, people who are in the trades, who already often are struggling in a lot of financial sides of their lives. And then you pile on top what people know about the pharmaceutical industry and the experience that people have when they go to the hospital, the experience that they have when they're trying to interact with their insurance. That's huge. But then just what you see coming out of your check every week, it's a significant amount of money. And that doesn't necessarily even take into account the employer side. I'm just speaking to the average technician, installer, person who works in the trades. And so there is a significant felt pain associated around healthcare. And so speak to some of the things that you see specifically that contribute to that issue.
10:06Donovan Ryckis: I think the biggest thing, the employers try to do as best they can to work through this problem, they've been fed a lie for the past 10, 20 years. And that lie is you can't do anything to control the cost of healthcare. It's that simple. They have been led to believe there's nothing you can do. They'll come out to employers and say, "Wow, you had a really terrible year." So, they'll convince them that they were extraordinarily unlucky year after year after year and that there's nothing you can do to control it. So, businesses have been fed that for so long, they now believe it, to the point when I started, everybody kept saying, all the employers, as I'm talking to them about this problem, I'm trying to figure it out. It's a different market for me. So, I'm learning the market, learning how to talk about the problem. All these employers kept saying the claims are the claims. So that's what they would use to kind of justify. That's why it's high. The claims are the claims. What does that mean? That doesn't even make any sense. What does that mean? The claims are the claims. They use that as just their excuse for, well, that's how we got here. That's why it's so expensive. And I think what they meant is the conditions are the conditions. So the medical conditions that employees seek care for, you can't change. We all want the best for them. And no wellness program is really measurably going to change that or impact that. People have stuff going on. That's what health insurance is for. But a claim is actually a request for dollars for a covered incident. So that is wildly variable. So we can't change the fact that somebody went into the hospital for a heart attack. But we can change and affect how much the company paid for that on a dollar basis. And that's the part employers have had a disconnect for. They're just looking at it thinking the conditions are the conditions, whatever happens happens, and then I just have to pay for it at the end of the year. They don't understand the second part of it, which is where are these people getting care, and to your point, we all understand as Americans, hospital billing makes no sense. Pharmaceutical companies are making a ton of money. So what businesses can impact is those claim dollars, not necessarily the condition. And that's the disconnect.
11:55Bryan Orr: I think when a lot of people hear this, and again, we're going to talk specifically about Kalos. If you're listening to this and you're like, "Oh, Bryan brought on this guy and he's just going off the rails here." No, this is specifically something we did at Kalos. So, that's what we're going to be talking about here, with some specificity. Obviously, we're not going to give away everything, because these are humans who work here and we don't want to talk about them too explicitly, but we're going to give some examples of some things that we're talking about. And I think a lot of times the mistake is to think that you get what you pay for. You hear that all the time. You get what you pay for. So, if you pay more for healthcare, then you're getting more. And you've shown, we've seen over and over again, that just isn't the case. There is no logical nature to what they try to invoice. No HVAC business could operate the way hospitals operate. And we've seen that slowly and surely as claims have come through over the past couple years. I've run a couple by you to see, because it's not a matter of overbilling by 10% or 40% or 80%.
12:51Donovan Ryckis: These hospitals really try and bill back the health insurance in multiples. So, we know what the going rate is. We use basically a Medicare reimbursement rate for the going rate. So, Medicare is the biggest insurer in this country. They have a pre-negotiated rate for anything you could possibly get done in a hospital. We know that rate. And then we try to settle all medical claims anywhere between 110% to, honestly, 300%. So, up to three times more than what Medicare pays, which sounds crazy. That sounds like we're overpaying by three, but in truth, for medical insurance and those payments, that's actually remarkably less. So, we've seen a lot of bills come through, and we're working on one a couple weeks ago, I think I emailed to you, where the hospital's billing, I think they were billing 12 times, which is not unusual. 12 times, 16 times. So, you have a procedure that might only be 8, $12,000. Suddenly, it's 120, 160, 180. And that's what we can focus on. We don't need to handcuff the entire employee population. We can focus on the 5% or less of claims that are going to be in the six figures, and that really changes the picture for premiums going forward.
14:15Bryan Orr: Yeah. Because ultimately everybody's okay with paying for good service. That's not the question. The question is, when you have a group plan, which is what we're talking about. So when you offer your employees insurance, you're saying, "All right, everybody, we're grouping you together and we're going to pay these expenses." There is definitely a reality to the more exposure you have, the more you're actually paying out, the more the plan's going to cost. Duh. So, if you can eliminate those massive claims and keep it to reasonable and regular expenses, then the cost of the plan goes down, or at least it should. But what you see, first of all, in traditional healthcare is that's not necessarily the case. You're not necessarily rewarded for keeping your costs low. That's one thing. And then the other side is that the incentive to keep costs low isn't really there. Who really cares about that, who's really paying attention to the interests of not only the individual, the company, but also in the interest of keeping healthcare costs reasonable across the board?
15:09Bryan Orr: I'll tell a quick story just so you anchor home what we're talking about here. This was probably 17 years ago. We were in Asheville, North Carolina, and I was helping my buddy install an AC at his house. So, we're on a vacation, and my second son, who was just a baby at the time, I think he was probably two, got his finger caught in a fold out bed, whatever you call that, sofa bed, and it almost severed the tip of one of his fingers, and it was still intact. It was a lot of tendon damage, but he's a little kid, so they healed pretty good. So, we ended up going to the emergency room. Well, when we started getting the bills back, and we didn't have any insurance at the time, the surgeon cost, I don't know, $1,500, $2,000, something like that. I got that one first. I paid it right away. I was like, "Okay, I'm good." Then a couple weeks later, these other bills just start trickling in, and this little thing and you'd pay it, and this little thing and you'd pay it. And then all of a sudden, we get this hospital bill and it's something like $15,000, something exorbitant. And so, of course, at the time, I didn't have money and we were barely scraping by with a brand new company. And so, I just keep being a Karen until I get a hold of the CFO of the hospital, and I say, "Hey, man. Look, I'm looking at Medicare. I'm looking at what you pay Medicare for this exact same procedure, and it's a tenth of what you're trying to bill me." And the guy literally, he was exasperated. He was sick of dealing with me. He literally said, "Yeah, but we don't make money on that. It's not true. So, we have to charge cash payers more." I'm like, oh, so you're saying that I have to pay more because I'm paying you cash and I'm not giving you all the heartache. That's how this works. Finally ended up exasperating the guy. I think he cut it down to just over Medicare rates or whatever. But had I not done that, had I not thought through that conversation and said, "Look, this doesn't make sense. At scale, you're already paying this much. You're just going to charge me that much more to make up the difference, to make your profit margins." And that's fundamentally unfair.
16:34Donovan Ryckis: Yeah. And they still try to say stuff like that. And that's, like you said, 17 years later or whatever it is. Hospitals still try to say that. It's not true. They've done studies on hospitals that accept higher percentages of Medicare and they do just fine.
17:02Bryan Orr: Yeah. Ultimately, it comes down to how well you run your business. And if you have nonsense billing practices, that's not a very well-run business. So, let's talk about specifically. Now, obviously, there's a lot of different ways to structure plans. There's a lot of different ways to do things. And ultimately, the way I understand Ethos is you're a problem-solving agency. So, you're looking to solve problems. You're doing it, structuring it in a way so that you win when your clients win, more so, and really more of a flat rate type of thinking in general, but you're structuring it with that fiduciary concept in mind, acting in your client's best interest. But let's talk specifically about some of the things that we did, because I think people are interested in that. I've had a lot of people ask me, and so now I can point them to this podcast rather than having to give them a long speech each time. What did we do, and what are some of the things that have worked well, and what are some of the challenges?
17:30Donovan Ryckis: So the biggest challenge, and particularly where you were prior, is the restricted amount of data that they release. So when we're thinking about health insurance, particularly on an employer basis, we need to think of it differently. So insurance is, in the unlikely or untimely event, your insurance will cover you. So you think about home or auto or whatever, or life insurance, either for the unlikely or untimely death. Employer-based health insurance is completely different. What we're really doing is healthcare financing, because it is going to get used every single day. Every single day somebody at your company is using it. They're going to the pharmacy. They're taking their kids to the emergency room. Whatever it may be. So fundamentally, yes, there is an insurance aspect for our high dollar claimants, but we need to look at it differently, because this cost is not going to go away and claims are happening every single day. So we can't keep looking at this like, "Oh my gosh, I'm so surprised that we had a bad year. Maybe next year we'll have a better one." It's not a hope and wish strategy. It's not going to work. Once we understand it's healthcare financing and your rates are going to be based off your group's own experience and own claims, then we realize, oh, we really need all the data. And where you came from, you're a little bit restricted. And that's really the first step, is freeing that up, making sure we're capturing to the penny. I know where every single penny in your healthcare plan goes. And from that, we get to set forth those strategies each year. So having the data, and then we can start to price out.
18:54Donovan Ryckis: So the easiest thing we did, the first thing we always get into, is the pharmacy benefit manager, which really is the most nefarious piece of any healthcare plan. It's the easiest to fix and it causes no disruption to employees, which is fantastic.
19:21Bryan Orr: Okay, so this is essentially the middleman that the healthcare company put to set the prices on drugs, which is this weird instance of self-dealing.
19:21Donovan Ryckis: So you have this insurance company, and then they own their own pharmacy benefit manager. That pharmacy benefit manager sets the prices for drugs for Kalos company, and they get a spread in between. So basically, it's a conversation that you as a company never have with them. Hey, what are my drugs going to cost? And they're internally self-dealing that piece. So for a company your size, when we fix that, that's usually a couple hundred thousand that we can reduce your annual drug spend without even asking anybody to do anything different. So fundamentally, any successful benefit strategy should not be based off asking employees to do something for you. It should be the employer saying, "This is what we're going to do to help the employees." And those are the strategies that are win-win. And that's what really makes the healthcare plan work. You're lowering the cost for your employees. You're lowering the cost for the plan. And then in the future, you're going to lower their premium. Basically getting rid of that spread pricing inside the pharmacy benefit manager. Just pure fraud, waste, and abuse. The employees can go to all the same pharmacies. We're not asking them to do anything different. They don't need to engage any differently. We're just seriously just removing profit for insurance companies in that step, which is something none of us feel too bad about doing, I would say. So, no. Oh, and this is the hot button in the news. If you pay attention, next time you see something on pharmacy benefit managers, read it. This is where employers are now starting to be sued for their choice in not only insurance companies, but pharmacy benefit managers, which was another one of the reasons I jumped over to healthcare from 401ks. People were getting sued for 401ks, and in that very first healthcare case, I'm like, they're looking at the wrong place for waste. They're looking at, again, a quarter of a percent in 401k waste, and I found 40% on my very first case. That's where the problems are, and that's largely caused by the pharmacy benefit manager.
21:11Bryan Orr: So that's one good one, because really what we're talking about here is where spread is taken by these organizations in ways that we are not aware of. Another one that's come up, and this isn't necessarily that, I'll let you speak to it because you know a lot more about it than I do, but this idea of insurance companies showing you what they were invoiced and not necessarily being as open about what they actually paid and how that works.
21:38Donovan Ryckis: Yeah. Billed versus paid, essentially. And those numbers get quite ridiculous. That's something, again, thinking of this as healthcare financing, that's the kind of stuff you would want to know going into it. When you're choosing a network, let's say you're choosing a big-name insurance company, essentially what you're choosing is a network. That's the outward facing thing that you think of. So when my employees go out, they're going to say, "I have this insurance or that insurance." And what that really means is that network is pre-negotiated rates, again, for any service that could be done. The downside of that is they're never going to tell you what those rates are, because they view that as their proprietary company information. Again, just like the pharmacy benefit manager, when you actually want to get down to the cost, the things that are variable, the things that you can save, you will not go to any of these big insurance companies. They will not price out your drugs for you. They will not tell you the price of claims. So, when companies go into proposal for the next year, it's not like they're going out and saying, "Hey, look, here are the claims we had. Can you show me what you would have done?" That conversation doesn't happen. So the network is that reimbursement level. You'll just never know what it is. And it is going to be different at every hospital for every service. They'll never release it, and it's impossible to benchmark. So that's what we work on with your group, is making sure those rates are fair. And to be honest, what we do is negotiate them more on a one-on-one basis on those high dollar claims. And that's what lets us make the impact. Again, it's going to be somewhere between 3 to 5% of people, and the employees aren't getting any of that friction. All this stuff is happening on the back end, where we're negotiating these payments, which of course, if we take a bill from $100,000 to $10,000 and they have coinsurance, the employee gets that reduction as well on their portion of the bill.
23:31Bryan Orr: And that's been a huge part for getting employees to see the benefit, because let's be fully transparent, at least in how our plan is structured. The way our plan is structured, sometimes there is some friction with the healthcare providers, because healthcare providers are used to seeing essentially three different insurance cards, three different types of companies, and when you provide them with something that says something different, they don't want to do the extra work. And so they'll just often tell you, "We don't cover it. Oh, we don't cover you." And that's not generally true. In many cases, there have already been pre-negotiations and conversations and all that stuff, but ultimately, with the way our plan is structured, our employees are always covered and we will always find them a solution. Where it becomes a real positive for the employee is when we can reduce what they pay out of pocket, and that's a strategy that we use regularly.
24:24Bryan Orr: I think one of the really good examples was actually the one that you have as a white paper on your site, where you were able to significantly decrease the cost of having a child. Talk about that one a little bit if you remember it.
24:24Donovan Ryckis: To that point of networks, it's this weird thing, because if you think of it, a health insurance card should be much like a Visa. If I'm going to go get lunch, I don't have to call restaurants and ask, are you in my Visa network? They just want payment for service. And it should be the same for hospitals. However, they do get stuck in easy, just repeat mode. And unfortunately, if you think of any type of medical practice, the least paid or highest turnover position is going to be that billing clerk. And sometimes you get the bad customer service, if you will, from that experience. When you don't have a network with your employees, it's like, yes, they can see any physician they want anywhere in the world, or anywhere in the country, but they can't see everyone, because if you're going to go to 100 businesses, say you go to 100 restaurants, one to five of them are going to be total crap. They're going to be unreasonable and bad billing procedures, and just same thing with medical practices, unfortunately. Just some of them are just bad businesses. They try to overcharge, they don't answer their phones, whatever it may be. It's just a tough thing. So when we have to engage with an employee and have them help us through this process, they share in the savings for engaging with the healthcare plan. So we don't want to make it punitive, like, hey, you have to help us coordinate this bill because your provider is not responding to outreach, but we give them something in return. So in the example you were talking about, it was a pregnancy, just a regular scheduled delivery. It's at a hospital that we've paid hundreds of times in your plan. I just checked it recently. There's about 400 times we paid this particular hospital in the past year. And for whatever reason, this one claim, they were wanting, I think, five times for a pregnancy delivery, and they just wouldn't come off of it. And last thing you want to do is ask a pregnant woman to change her birth plan and go somewhere else. Nobody wants to do that. So, we ended up getting a little bit creative. The hospital absolutely did not want to accept less than five times from the insurance company. So what we asked the member to do from your company is just, hey, can you inquire about the cash price? So when they inquired about the cash price, it was exactly the Medicare rate, which is about $6,000. And meanwhile, they're trying to charge us 32 or something like that for the plan. So we're like, perfect, you got the cash price. We basically organized through the Kalos CFO to just prepay that service directly for that rate. And since the member basically took two phone calls and helped us work through that process, they actually delivered their baby at no cost. They left the hospital, nothing else to worry about.
27:08Bryan Orr: And those type of experiences are not abnormal within our plan. You hate for it to be that painful, and the vast majority of times it's not, but when it's going to be, obviously, it doesn't take a rocket scientist to know that if you have 10 occurrences like that throughout the entire year, that can really change your plan expense. And especially when you're thinking about it now the way that we are, where it's structured in such a way that we're not looking at it as a surprise. We're just funding a plan and we're paying out of that funding. And then you have some catastrophic insurance to protect in the case of really unexpected things. But keeping those regular reoccurring costs, like having a baby, that's something people do all the time, keeping it in that reasonable range. And is it really that much harder for us to cut a check and pay for it than it is to run through the typical billing process? The answer is no. Because I know that a lot of times, and I've even had this emotion, people will say things like, "Well, look, they deserve to make a profit, too." Totally agree. Totally agree. The problem with healthcare is that there's so much just trust us built into the system, and then they just bill you whatever the heck they want afterwards. And that's not a good system. Can you imagine if we did that? Hey, we charge Mrs. Jones $6,000 for a change out and then Mrs. Thompson $45,000, and we don't give any reason. It's just because we decided that that's what we're going to do. Of course, everybody would be down our throats, would not accept that. And that's why, unfortunately, if you want to have a plan that capitalizes on a lot of the things we have, better employee care, better control over costs, then you need to engage in this way. And that's what you guys do. That's what you do on our behalf. You do that engagement so that we don't have to.
28:31Donovan Ryckis: Correct. Yeah. So, for the employees, it's the same process. They're going to these providers, providing their insurance card. Essentially, what that provider does is then they're calling and pre-authorizing the service and the amount that they're requesting. So, we're working on the back end when those come in, and it's a very small percentage of them that aren't just automatic. It's really those gross examples.
28:58Donovan Ryckis: You actually had one of the worst examples I've seen in a couple years. It was a tiny little surgery on a finger or something, just small surgery. The local hospital was trying to pre-authorize that service for $92,000. And we're like, "Wow, that seems really unreasonable." So, we ended up doing this, which we do quite often, is we just, that same physician that was going to do the surgery, we said, "Hey, where else do you have privileges?" Turns out he had privileges at a surgical center a couple miles away. We end up doing the exact same surgery, no delay, for less than $3,000. Same doctor, different building. That's how gross and ridiculous these medical claims are. And you can see very quickly, it would only take two or three of those to put your company in a very different position come renewal time, than paying these claims and never hearing about them and just thinking, well, the claims are the claims. What am I going to do?
29:27Bryan Orr: Yeah. Things like imaging are really, really common cases. You get a CT scan or something done at the hospital versus at an imaging center, it can be 5, 10x difference in price in a lot of cases. It's significant. The thing that a lot of people say that I want to just push back against is, well, you can't put a price on healthcare. You can't put a price on being healthy. It's like, of course you can, and we have to. We have to take it seriously, because they're already putting a price on it. The system is already taking advantage of people because of their lack of information. And that is my definition of taking advantage, is when you're using your secret information about this very complicated system to keep people paying, keep people subservient to a system that they're not really aware of, and keeping them in the dark, like, well, I guess I got to pay it. That goes back to what you said from the beginning. Well, I guess the costs are the costs. No, they're not. If they were, then we wouldn't have this problem. The reason we have this problem is because it's highly convoluted. And another thing that I want to mention that's even outside of this conversation is that taking control over healthcare and preventive measures within your own organization also prevents you from paying for the stupidity of people who do not work for you. You want to have some control over the people who work within your organization, because then you have some control over, hey, I can see that this person is living a very unhealthy lifestyle. And of course that's also going to impact their work product. That's going to impact everything. You're not not hiring somebody just because they're unhealthy, but you now are able to bring healthy people who have a good mindset into your organization and reap the savings from bringing those types of people into your organization, and not the entire population, which I think is another big part of the savings equation. But also, just, you deserve to be able to bet on yourself, and there are ways you can do that that a lot of people don't even think about.
31:20Donovan Ryckis: I think often when we talk to employers and they haven't heard this stuff before, they're coming off two decades of training on how this healthcare problem works, and they just believe, hey, if the costs are going to be lower, we are inherently going to take away from the employees. We're going to have to give them a higher deductible, a smaller network, more copays, more coinsurance, and fundamentally they're missing the point there. That's not at all the process. We are not taking away from employees. We're also not delaying care in any way. Or the other thing is also helping provide guidance, so that there's two very complicated systems working hand in hand, and we had this conversation when we first started working together. There's healthcare finance, which is what we've been talking about so far. How does the financing work? Where's the money going? How can I impact that? And then healthcare delivery is really freaking confusing too. So people figuring out, where do I go? Who can I trust? How can I vet my doctors? How can I get the price ahead of time? Imaging, to your point. I got to get imaging. Where can I go? We've had MRIs come through at a little under $500 all the way up to $16,000 for the same MRI. So giving employees some guidance to navigate that system as well is really important.
32:43Bryan Orr: Yeah, for sure. And that's actually something that we've seen. I'll just mention a couple things within our plan that we do. Ethos provides us what we call a care coach, who is somebody who helps actually walk our employees through care. That's something we're still vetting, how that works in the long run, and I don't want to sell everybody on that, because we have to still work that out. But it's been working very well for us, providing some of that care. Also, just what we found out is a lot of times people get significantly better care at a lower price. A lot of times there's specialty centers that do a lot better job taking care of particular needs and do it at a much lower cost than doing it at the local hospital with whoever you ended up first talking to when you went to the emergency room. Those things can be significant, and not just significant in terms of cost, significant in terms of the experience that the employee has.
33:12Donovan Ryckis: Yeah. I mean, it's the idea of specializing in something. I mean, you ever think of all the things your neighborhood big box hospital has to do, all the different conditions they're treating? It's wild. So, with the Kalos plan, we have a network for a whole host of different conditions that might arise, where we can help redirect, either second opinions or, would you like to go to this facility? This is what they do. And it's better outcomes on both sides. Those practices understand how to bill for those procedures, because that's the only thing they're doing day in and day out. And because of that, they're also going to have remarkably better outcomes, because they're specializing in that one piece of care. So, we've had stuff happen in the plan where we've asked the member, "Hey, would you like a second opinion at the Mayo Clinic? It's the highest rated Florida hospital, in Jacksonville. We can send you there at no cost." Or, "Florida Cancer Specialists. There's 100 locations throughout the state. Would you like to go get a second opinion or get care from there?" So, yeah, anything we can do to help navigate that. We can't lose sight of the time. That's when employees are in need. They're in their time of need, and that's not the time to hassle them with networks and billing, and our goal is to make this easier, provide some transparency and a little bit of guidance to get through the process, and also not bankrupt them at the end of it.
34:37Bryan Orr: One of the things we added that I think a lot of people will be interested in is this idea of direct primary care. Talk about that just a little bit if you would.
34:37Donovan Ryckis: So direct primary care is very exciting, first year for it in the Kalos plan, and it's been going really well. I've been hearing great things about it. But it's the idea that you should actually have a primary care physician that you can see, because the average wait time to get an appointment at your primary care, I think it goes past 5 years, has gone between 17 to 21 days on average to get an appointment with that, and by then you're cured or maybe in a worse place than you were. I don't know. It's a little late. So that definitely leads a lot of people running into ERs and urgent cares unnecessarily, just because they don't have access to that care. So direct primary care is what it sounds like. It is same day, next day access to your provider. And instead of the 7 minute average appointment time, which is a double estimate to what I've spent with any primary care in the past, seems like 2 to 3 minutes, but instead of that, these physicians have 30 minutes to 60 minutes with the patient on a same day, next day appointment access. And the employees can go there for anything from stitches to blood work to whatever medical conditions. They can get generic drugs there. They can get guidance on these issues that we're talking about, like advanced imaging and specialists. So very real, quick time access to a doctor, how it used to be maybe 100 years ago, in my mind.
36:02Bryan Orr: I'll just give you two quick wins on that. Both my wife [name removed], a lot of you know her, and then also [name removed], a lot of you know her through the symposium, have both interacted with the direct primary care, and they're two different people because [name removed] lives in a slightly different area, and what they find so relieving. I mean, we had a situation with my son even before we were fully signed up for the plan, but I was like, hey, just call her anyway, just see if she's willing to help you out. That's awesome. You know how nice it is to be able to call a friendly voice, somebody who you already are familiar with, who knows your kids' names, who's probably seen their faces before, and you can say, "Hey, our son had these sores in his mouth. Hey, he's experiencing these sores. Send you a quick picture." "Yeah, okay. It looks like this. Here's what I would suggest. If it gets worse, you may need to go in, or we can set up an appointment tomorrow." But here's that confidence, because anybody who, and again, a lot of us are tradesmen. We know that it's a highly male-dominated industry. Something we're working to fix, but that's a common thing. And when our spouse, the ones who often tend to be the primary caregivers to our kids or whatever, are panicking over something because they are trying to solve this problem. You know that a lot of the traditional methods, even things like telehealth, are just not very personal experiences. And we've all found this to be a really, really nice experience. And it is just that simple. Just the simplicity of somebody who you already know, you're already comfortable with, that you can talk to. And it's not the typical doctor experience where you call the doctor's office and you're talking to a receptionist and you have to set up an appointment, and even when you get there, somebody comes in and they prep you, and then, like you said, you get a couple minutes with the doctor and it's a big rigmarole, and often you just have a quick question. You want to get some reassurance that it's okay, that you're not being a bad parent, or that nobody's going to die. That's often all that you need, is just that reassuring voice on the other end. And so that's where I think that comes in really handy, and that's something that I think a lot of employers could implement without too much friction, because if I understand correctly, this direct primary care thing is exploding across the United States.
37:51Donovan Ryckis: It is, and the great thing is, for your plan we made it elective. So there is a plan option where they could have it and there's a normal plan option, because some people are going to be like, don't tell me where to go, kind of thing, or whatever. There's plenty of doctors they can choose from in the direct primary care network, but some people obviously just want to do it their own way. So we had a lot more engagement in it on the first year, and I imagine as the employees talk about it and talk about their experiences, and the fact that, keep in mind, anytime they see the direct primary care they're not paying anything. So, if you needed to go run in there for stitches and you brought your kid, they're not going to have to worry about a payment. And for your healthcare plan, you can imagine that's going to be a lot less expensive than if they would have run into the emergency room, because you're going to pay at least three grand for three stitches, which is insane to say, but that would be a conservative estimate, versus just going into the local direct primary care that can see you quickly.
38:46Bryan Orr: So yeah, with the last few minutes, if you wouldn't mind talking a little bit about your documentary, introduce us to your podcast, so people can find out more about what you all do.
38:46Donovan Ryckis: So earlier this year, Chelsea and I produced a documentary. It's called It's Not Personal, It's Just Healthcare. And it's about all the topics we talked about today, about some of the fraud, waste, abuse, how this thing is structured, the history of it, how advice comes about. It's not a lot of us. It's attorneys and physicians and former insurance executives and a few brokers who offer advice like we do, giving a snapshot of the industry. It is very interesting even if you're not interested in healthcare, because obviously we all have to consume healthcare at one point or another, whether we like it or not. And it's a good guide not just from an employer perspective, but just a consumer perspective of, oh, this is what's going on, I didn't know that, and it might help you navigate some of that. So that's available on our website. We are working on getting it to streaming platforms, but I think that's going to be into next year, but we have full access on our website at ethosbenefits.com.
39:43Bryan Orr: And then also you guys have a podcast. Talk a little bit about that and what people can expect from that.
39:43Donovan Ryckis: Yeah, so we have a podcast. We're actually relaunching it. We are changing it to be a little bit more focused on our business and what we do for clients. So that's going to be into 2025, I guess. So we have a new name. I don't know if we made it official. So I guess I'm going to have to wait on that. But if you look up Ethos Benefits podcast, hopefully that'll come up next year. And it's going to be working with different kinds of vendors and solutions that we use in our healthcare plans to give a real life, simple snapshot. I don't want it to be insurance jargon or acronyms, which this industry is famous for. It's insane. It's going to be real time applicable strategies and results, and how the stuff affects both employer and employee, and how it can be used.
40:37Bryan Orr: Awesome. Again, I'm sure all the announcements and everything will be on your socials. Ethosbenefits.com is the website. Check that out. You guys have won a lot of awards. You've done great work with us and many others. Just to be clear, we are not the easiest client. Donovan has had to work with my dad multiple times, and let me tell you, he is a crusty fella when it comes to dealing with healthcare. If any of you think it's all been kumbaya, it has not. It has been a battle to make this happen. And it is. Healthcare is a battle right now. It is not easy, but the results are good outcomes for our employees, and especially in terms of the care. That's what I'm most excited about. I told you guys that right off the beginning. This is primarily not about money. It is about money, but it's not primarily about money. And what we do save in money, we're going to return to our employees. We actually did that last year, where we wrote everybody a check out of the plan and said, "Hey, because you saved money in the plan, here's a check." We weren't able to do that this year. We just rolled it back into the plan. But there's a lot of things that you can do with healthcare that give a better experience for your employees. Anybody who's out there who's interested in finding out more, I would encourage you to go to the website. Again, Ethos only works with certain size organizations, but I'm sure they can also help connect you with people who are going to be able to serve you, even if you're a smaller organization. But regardless, being aware of what's going on in healthcare and what your options are is going to empower you, going to empower your employees. And mostly, I want to thank you guys for taking the time to work with us through all this. Like I said, it hasn't been easy, but it's been worth it. And also, just the impact that you're having on healthcare and the conversations surrounding it. It's really important that we have these conversations and that people are well educated. So, thank you for coming on, and thank you for doing this important work.
41:57Donovan Ryckis: Thank you for having me on, and we're honored to work with your company. We take the ability to shape any company's healthcare plan, at the end of the day, it's the health and welfare plan, that's the legal definition, for the employees, we take that very seriously. So, thank you for both.
42:24Bryan Orr: Appreciate it. Thanks, Don.
