Transcribed from the recording and lightly corrected. It may contain errors; the recording is the record.
00:01Welcome, welcome 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?
00:01Chelsea Ryckis: Hey everybody, welcome to this week's episode of The Business of Benefits. This week's episode is a little bit different. So what it is, is it's Donovan and I's talk with a client at a recent conference. So the conference was the Florida Health Care Alliance on May 1st, 2025, in Orlando, Florida. And this is a large group of employers, well over a hundred of them, who come together annually to this conference, and they discuss healthcare purchasing and making good healthcare decisions. So we had a full room, at least 100-plus employers, mid to large market. We ended up inviting about 10 of our local clients who attended as well, and even five of the Ethos team members flew in from all over the country to just be with the clients and hang out for the day. So the coolest part was we brought up one of our clients, Bryan Orr with Kalos Services in Florida. They're an HVAC company with about 400 employees. And under his leadership, he has completely transformed his healthcare program over the last three years. And he went from being kind of stuck in this year-after-year renewal game, increases, crappy situation, no data, to an amazing program. So part two is all about his transformation. And I'll give you a couple little hints. He's paying 42% less. Him and his employees are paying 42% less than the national benchmarks. And the employee cost share is 50% less than the national benchmarks. And that's before direct primary care, accessing a physician same day, same doctor all the time, right? Direct contracting for imaging, for cancer treatments, for outpatient surgeries, for all sorts of things. Literally free healthcare. It's incredible. Free specialty drugs. I can't wait for you guys to hear about this program, because on paper it's one of those things where it sounds too good to be true, but you can really design it. And the whole talk with him is about how he used his fiduciary decision-making process to yield these outcomes.
02:21Let's invite Bryan Orr up to the stage. And while Bryan is coming up, mention the books, if folks haven't grabbed a book yet.
02:21Yes, we have books up front. Books are basically a supplement to the documentary. If you haven't seen the documentary, there's also a QR code for that, along with the one that was just on stage. Bryan here from Kalos has been reimagining his healthcare plan since 2022. At this point we are benchmarking 42% below on a per employee per year cost, as well as his employees having over a 50% reduction in their cost share in their plan designs. And that's before stuff like DPC, our direct contracts for critical care or direct contracts for advanced imaging, or pharmacies where they can source drugs at no cost. That's just in the kind of SBC design. So, all right. So, Bryan, why don't you kind of introduce yourself to the audience? Maybe share a little bit more about Kalos.
03:19Bryan Orr: Sure. Yeah. First things first, I don't know where this photo came from, but I feel sorry for all the husbands out there, because after seeing this, nobody's going to be happy again. It's like catfishing in real life is happening right now as well. No. So, yeah, I'm proud and happy to be here with you guys. I run a construction business. We do air conditioning, refrigeration, electrical, a bunch of different things. I have spent the majority of my career as an actual in-the-field tradesperson, and didn't know anything about health insurance other than that I couldn't afford it for most of my life. I mean, there was a good period of time that I didn't even have it, because it just wasn't affordable with the employer I had before starting my business. But yeah, we've been in business now 20 years this September.
04:13When did you realize that something was really off about the way that you were purchasing healthcare, or just the healthcare system in general?
04:13Bryan Orr: First instance was before I even started my own business, when I didn't have any healthcare, and I didn't know any negotiating strategies. I just knew I didn't have any money, and so I couldn't afford to pay for a particular emergency room visit for one of my kids. And I just kept calling until I got a CFO of a hospital on the phone. And he essentially explained what I guess is very normal. I didn't know this when I was in my 20s, but that they had to cover the cost of all these other people who couldn't afford it by charging me more as an individual. And so I actually ended up looking up the Medicare, Medicaid rates and kind of comparing that, and he laughed at me. Eventually I ended up spending less, but it took months and months of negotiation to do that. And then most recently, when I really started looking for other options, we got a 30-plus% increase from our carrier. And it was the same sort of conversation that you said, and I think a lot of people faced. There were no real explanations. It was just, oh, your plan didn't do too well. And I know my employees pretty well, and I knew that we weren't overutilizing healthcare in any way, and it still was going to increase by 30%-plus.
05:38So when you got that increase, and I'm assuming that was one of the catalysts for you to really affect change. And I do find it interesting, we talk to a lot of employers where some of them, like we spoke to a company in Michigan. We were in Michigan on Monday, and actually they listened to your podcast on healthcare, and that's why we were invited up there, which was really cool. But they aren't at a place yet where they have a 30-plus percent increase, right? They're being super proactive. But then you have a lot of other employers where it's a very reactive, oh shoot, what are we going to do? And with you and your situation, what reasons were you given? You said your employees are healthy, right? You know that your medical loss ratio isn't that bad. What was the justification? Do you remember it?
06:06Bryan Orr: It was mostly just something like, hey, the costs just keep increasing. This is what we've got to offer you. And there were a couple options, but none of them were good. I mean, the best option was, like I said, over 30% increase.
06:36Right. So with the four... Well, one other thing that's important to mention about Bryan: he's got 10 kids. Yeah. So he's an active consumer of healthcare, is an understatement, right?
06:36Bryan Orr: I was worried about what you were going to say. You said he's an active, and then I was like, hang on.
06:36Totally. This is a family. Oh, and his beautiful wife, [name removed], is here. We're going to call on her about her direct primary care experience later. But 10 kids, right? So I'm sure there was a financial motivation as well as just, you're there a lot. You're using it a lot. So I think everybody knows in the room there's four parts to a healthcare plan, right? And generally, so Bryan didn't follow our advice. Shocker. He's very independent. We usually advise clients, hey, let's take a graded approach to this, right? Let's do maybe a PBM one year. Four parts. So as we explain it: TPA, stop-loss, network, PBM, right? So generally you're not going to change all four in one year, unless of course you're Bryan Orr. So let's talk about that, right? We could have taken a really graded approach, but you chose really decisive, aggressive action in one year, and I know it wasn't 100% financially motivated. So why'd you do it?
07:31Bryan Orr: Well, I'm a 10 kids guy, so when you're 10 kids, you make bold moves regularly, I guess. No, no. I think, so one of the really cool things that we've built in Kalos is a lot of trust of leadership. We recently were awarded a top workplace by USA Today and the Orlando Sentinel. And one of the things that our employees said was that they trusted leadership, and trusted essentially that leadership had their best interest at heart. It's that fiduciary thing again. And that trust has a time limit to it. And when you're going to do something that's really unique and really different, I wanted to go ahead and just do it all in one fell swoop, which communication was the key to that. I knew that we had this window of time where hopefully we can make a significant change. And so, let's do it all at once. Let's eat the frog. Let's make it happen. And everyone hung with me. I mean, [name removed], our HR director, is here. I mean, she did the majority of the work and was on board with it, even when we brought it up and it was that kind of gulp, we're doing this kind of a thing. But it just made sense. That's again, if you're going to do something that initially is going to be a little challenging and maybe a little hard to explain to your average consumer of healthcare, your average employee, let's try to make it a win as much as possible.
08:52And when Bryan talks about communication, we were very strategic about this. We crafted the why, right? We needed to educate the employees. We're taking away a logo that you've known and loved for five years, and we're replacing it with something... Yeah. Maybe not. Not loved. I wouldn't say... No? I don't think so. Yeah, that's true. But familiar, right? Familiarity, comfort, that type of thing. So we're removing that, and we're replacing it with something that you don't know, but we're telling you it's going to work a lot better, and blah blah blah, right? We needed to give them the why, which Bryan recorded a video. I don't remember how long it was, maybe a minute or two. Wasn't long. And so we use text messaging software as our primary form of communicating with employees, and we add dependents to it. So spouses, kids, whoever wants updates about their benefits program. And then that text message goes directly to the account managers at Ethos. So when they're having a problem, if they're having a problem, it's solved quick. But nonetheless, we use that mode. We texted out this video of Bryan to everybody, and he explained, this is why we're doing what we're doing. This is why it's going to work, and we need your buy-in. It's top down, right? I'm sure everybody in the room has experienced when you implement a decision when leadership's not really on board, maybe, or even they're going to go on a different health plan and the rest of the company can have that one. Yeah, that doesn't work. You need real buy-in. So you absolutely crushed it with the communications, and I think that's continued the last three years.
10:14Bryan Orr: Yeah, I mean, it has to be active, because of course it's not like anything's going worse ever than it would have the old way we were doing it, but as soon as you change something, everybody puts the spotlight and the magnifying glass on everything, right? Well, I never would have had this problem before. I guess you would have, and it would have been a lot worse. But being directly involved in that when that's happening, to say, okay, what's going on? I'll talk to you. HR will talk to you. Ethos will talk to you. That made all the difference. You have to directly address those real-world concerns. I mean, for me, price was sort of the impetus to make the decision, but ultimately I was never happy with the way healthcare was in our organization anyway. And so this was a chance not only for us to save people a lot of money, but also to give them much better care. And putting those together all at once is a really key thing, plus the communication piece.
11:08Right. So let's talk about the parts of the plan that we've kind of structured over the last few years. So first we have direct primary care. There's 28 total members enrolled right now in the direct primary care option. We have 71% engagement, and I credit that to [name removed], Bryan, their culture, as well as the communications portal. Emergency room visits have already decreased by 34%, which is right in line with the benchmarks. And then some of the feedback: Bryan's wife, [name removed], recorded a video a couple weeks ago of the DPC literally going to their house and doing physicals. How many of your kids did the DPC?
11:35Bryan Orr: I think it was... She's showing me right now. I know it's six. See, I'm good with numbers. As long as she's around, I can be good with them.
11:35But it was so incredible. Healthcare is local, right? And when you can bring that to your team. And the program's received pretty good feedback. Have you heard anything otherwise, or any comments on it?
12:03Bryan Orr: No, it's been... And again, I think this is a key thing, going back to some of the other speakers. You talk about utilization not being the problem, but it isn't so much utilization. We actually want our employees to go get their physicals. We want them to be in constant communication. But it's the way that it's being utilized. ER visits, obviously, for things where you could just literally get on the phone with somebody who you know and trust, you've already seen. And that's why you see that, and that's the feedback that we're getting. It's that personal touch. It's the time to actually talk through real medical concerns, because it takes a little bit to warm up, right? You don't want to tell everything to your doctor if you don't know them at all. And the DPC is great for that.
12:30And there's no wait, so it's same-day appointments. They're texting the doctor, right? Right. It's that access part as well. We have... Do you want to... Oh, yeah. Imaging. So in the last six months, we've had 21 advanced imaging services go through a direct contract that we set up. So the employee savings has been just over three grand. Employer savings just under 10 grand. It's not instrumental, right? You look at those numbers and you're like, well, okay. But the experience of the employees being able just to text in their ultrasound order and then be told exactly where to go, two miles from their house, and then they pay nothing. Have you used this yourself yet?
12:58Bryan Orr: Yeah, I did, actually. Yeah. And it was a really easy experience. And also, again, the thing that we tried to tailor, and again, we spoke about it in the last panel, is this idea of the employees winning every time there is a cost savings. And once they get used to that, there's trust that's built. And again, like we've said before, there's no correlation between the quality of the care and the cost of care. So in most cases we're actually getting a better experience, not only because of the kind of the concierge effect, but because there's direction to the best quality of care.
13:25Exactly. And I want to just touch on one thing Bryan said. So if you take anything away from, how can I be a really prudent fiduciary: create win-wins. Who am I talking about? Employer health plan should win. Employees should win. And then everyone advising you or in your healthcare supply chain should also win. That's going to be the most cohesive ecosystem for fulfilling your obligations. We've got PBM. So I'll let you do this one.
13:53So since kind of instituting the new plan, we've had a 70% decrease in the Rx PMPM. And if you look at it, that's not a typo. It is $17, which is stupid low. I mean, it's not unusual for us to see companies $250 and above for their per member per month on their Rx spend. A little bit of that is luck right now, but obviously we've had a good sizable decrease since starting the strategy as well. So I kind of put a claim example, which was Taltz, a psoriasis and psoriatic arthritis drug. Painful. The step one was making sure it's clinically necessary and it's not their first drug, basically putting them through step therapies, not going straight to the top of the class. We found out it was the fifth drug this member has taken. So the drug was approved, no delay to the member, nothing unusual, employee facing. There was no manufacturer assistance program, so we couldn't utilize that, but we did use our international pharmacy and brought the cost down to $3,500. Still expensive, but 93,000 on that one member. Any comments on pharmacy that you know of so far?
15:21Bryan Orr: Yeah, we generally tell people that they need to eat the lettuce that he was talking about at the beginning first, before they go to anything else. No, it's really, it's great, and it's easy. I think when a lot of people hear about international pharmacy, they start to get a little nervous. But again, the key thing there is the kind of handholding and the controls that are in place. Doing it by itself, where you feel like there's this faceless, nameless human you don't know making these decisions, is a problem. But because of the strategies you guys have put in place, where it's the same people you're used to talking to regularly, and you've proven that it's not only going to save you money, but it's also going to be a better experience.
16:15100%. So the next thing we did, actually the very first thing we did, was network replacement, also known as reference-based pricing, which I know terrifies a lot of people. So we have done this since October 2022, and again, normally we don't recommend this first year, but Bryan is bold and he's a leader, and he did it. And these are the numbers. You can see them yourselves. So billed over 16.7 million, and the plan has only paid 3.2. Nobody's been told they can't have a surgery. Nobody's been denied care. No balance bills.
16:46No balance bills. 81% discount, which is pretty incredible.
16:46Donovan Ryckis: Any thoughts on... So obviously we've been doing this for a while. Looking at kind of that 18 claims example, we've had somewhere in the neighborhood of 10,000 claims since October 2022 in a network replacement doing the reference-based pricing. How many of those claims, other than the ones in your family, have you been even aware of, or have we discussed? Obviously there's been a couple claims over the years that we've discussed, but seeing this billed versus paid number, everybody's going to think, oh my god, you must spend all week managing the issues, right? So over that time, what's been the experience?
17:12Bryan Orr: Yeah. The only... And this, what Donovan's referencing, is my dad is in the business. So we started the business together, and he's kind of retiring out, and he just had a cardiologist who was not having it. And my dad can be an intense guy at times. So his first thing when this came up is, he's like, "Is this even real insurance? I don't think this is real insurance." Like, "Dad, it's real insurance, trust me." And so you've got to work through... So there have been some cases where initially providers push back. And it's usually at the hospital somebody looks at it, oh, we don't accept this. But every time we work through it, every single time. And so there is that, that you have to prep the team that sometimes they're going to say these things, and this is what you have to do. And so there is a little bit of that handholding. But again, I mean, the numbers speak for themselves, and a lot of these savings we can pass right along to the employees. And that's the key point for me, because again, the increase was a bummer for me in the business, but I was more concerned about, you have somebody who's making 22 bucks an hour, barely scraping by. They can't afford these increases. And so any way we can save them a few bucks, that's really important to me.
18:36One thing that was really neat: he had such great plan performance the first year that we went on this journey that he actually gave a dividend to all the plan participants, as a thank you for believing in this change. Thank you for being on board. Remember that video? Thanks. Yeah, kudos. That was huge. So do you have any stories that you'd like to share? I know you mentioned one to me recently about an employee who left. I think that's a pretty cool story.
18:36Bryan Orr: Yeah, that was cool. There was one of our IT guys who got an opportunity to move to Savannah and open a hotel with a group. And so he had to take that opportunity, and I was just talking to him. He was very grateful. It was just a nice conversation. He said, "You know, the thing I'm going to miss most, though, honestly, is this healthcare program that you guys put in place." He's like, "I was able to get so many things worked out with my health, and the culture around wellness and all that's been so great." And that was really great to hear. The other ones that stick out to me are primarily people having babies, because we've really been able to not only save a lot of money, but also just that, because again, a lot of times it's first-time parents, and that experience of what you have to go through to have a baby, and just kind of all the worry and fears and all that, but then just not knowing what you're going to have to pay always freaks people out. And so in many cases we've been able to essentially give people a free baby. Is that what it is? We have extras, so we'll hand them out. Anybody else want a free baby? I got a lot of them.
19:58Work at Kalos. I should work at Kalos.
19:58Bryan Orr: I'll usually give you the teenagers first, though.
19:58So that's... Yeah. So we have had four deliveries since January, and the employees all got their child deliveries for free, which, January '25. So Kalos as a company has a lot of babies as well. Is it weird to say it's a baby-making company?
20:24Bryan Orr: I guess I'm just a good example. What can I say?
20:24And sometimes with network replacement or RBP, you're just fighting for what's right. So when we started this and realized we had a lot of child deliveries, the hospital started pre-authing us for 38,000 for normal deliveries, and that wasn't going to fly. And it took a minute to get through that process. And in that first one, we asked for the member's help, just like his engagement: hey, can you ask them about the cash price? Can you do this, can you do that? And he took one or two of our calls from the team, and we were able to pass that savings on to him and kind of do that program where he didn't have any cost share towards that. But the national average for a child delivery is 18K, and this one unfortunately took a bit of a fight to get to that number.
21:18Can we go back to the skin graft? So this is another example. There was an employee at Kalos. He was bit by a spider on his pinky, so smallest finger. The hospital pre-authed his skin graft at over 80,000. We were given a discount of 30%, at 57,000. We were able to redirect this employee, same physician, who just had admitting privileges at an ambulatory surgical center right down the road. $2,000. 97% [unclear]. Nothing else. Yeah. Simple. That was one of those things where the first option is always to keep the patient and the member at the same facility they were trying to go to, with the same doctor. But it's not always possible. The plan can't take a claim paid to this excess, because what's going to happen is at the end of the year, that excess is going to be divided amongst all the other plan participants. And that's why we have to kind of monitor this. But this was kind of one of the most absurd examples. No delay in care. Same physician, same city, maybe a couple miles down the road.
22:14So we hear a lot of fear-mongering, whether it's from hospital systems, brokers, carriers, about innovation in healthcare and kind of walking this path that you did to more transparent, data-driven plans. Can you speak to the experience on maybe some of the challenges, administratively or however, and how you overcame them?
22:14Bryan Orr: Yeah, I mean, the first thing, which there was some fear associated with it when we wanted to make the change. I remember meeting with [name removed], because we were still talking to the prior broker, and they were begging us. And it wasn't just like, oh please, we make so much money off you, please stay. It was like, this is a horrible mistake, you're going to regret this. I mean, it was really extreme. And these are people who I've known for a long time, very nice people. They were always trying to take me to lunch and always trying to take me to basketball suites. I wonder how they had all that money. Anyway, they were always wanting to take me places for some reason, or give me things. But yeah, there was just a real panic around that. And I remember [name removed] and I kind of sitting down and saying, "Do we do this?" Because we know that anytime you take this, this is a risk, right? This is unknown territory for us. And I think anybody who's going to walk down this path is going to feel that way. But again, the numbers speak for themselves. And the level of transparency that Ethos was able to bring to the table was so much greater than what they could provide me. They could beg me and threaten me all day long, but they wouldn't show me anything that helped me make a different decision. And that became fairly apparent. Would you agree?
23:35So I run into this a lot, right? Where I just spoke to an HR up north, and she's like, we would love to work with a transparent broker, but we get NHL box tickets from our broker, and that's a huge part of our culture. I hear stuff like this literally every day. What's your opinion on that type of advising relationship? And then do you think it's going to change in the future, with these lawsuits, with this fiduciary responsibility?
24:02Bryan Orr: I think it's going to change for that reason, but I also think it's going to change generationally. I'm an old millennial, but I think you're dealing with people who are used to being marketed to, who can sort of see through, all right, you're buying me swag, or you're taking me to these box seats, or you're taking me golfing. That money comes from somewhere, and so what aren't you telling me? I would much rather you not take me to lunch. Send me the price. We can do a quick Zoom call. I make decisions. I move on with my life. I don't need additional friends. I got plenty of friends. Now, ironically, you guys have become friends because of how well this has all gone. But that's the really good reason to have a partnership and a relationship in business, is because the results are benefiting the employees, benefiting the team. And I think more and more you're just going to find that in my generation, and younger people aren't going to be open to that more traditional sales model. I don't think it's going to play.
24:56Yeah. They're going to actually expect results, and more. What are you most proud of with your program?
24:56Bryan Orr: I'm proud of the collective will of the team, of the Kalos team. [name removed] obviously did... I can talk all day about, look what I did, when the reality is I did almost none of it. She did almost all of it internally. But then, yeah, the Ethos team. Super proud of you guys, because you had to push through all of the... Because I'm a quick decision maker, but then every time something new would come up, there's always emotion around that. And my dad was the best example of that, because people are afraid to change, and the way that you handled it was incredible. He did a really good job with it.
25:51For anybody considering change in the room, right, which is pretty inevitable if you're still kind of stuck in this status quo, more traditional model. It's really not sustainable. So change will come knocking, whether it's this year, next year, the following year. The key, and I'm curious if you agree with this, is working with somebody that's going to know where these points of friction are and how can I solve them the fastest, right? We know if we're going to change something, someone's going to be upset. Some doctor's going to be out of network. Some drug's not going to be covered. It happens every single time, even with the best intentions. But how quickly can we respond? How quickly can we make people feel better about this and solve their problem a different way?
26:17Bryan Orr: Yeah, that's exactly right. It's first getting ahead of it, communicating. So that way, when you have that conversation, say, just remember, we talked about this, that these things will happen sometimes, but in the end, if you can just let the emotions go for half an hour while it gets worked out, in the end it's going to be a much better experience. And that's what we've seen play out. And that's the key here, is that when you make people a promise, when you say that... And again, this is the whole concept of fiduciary. As an employer, I'm making you a promise that I'm doing something that I really know is best for this organization. When we bump into these situations where maybe you don't feel good about it, I need to demonstrate that I'm on it. And that has to be top down. That has to be from every part of the stack of how you design these plans.
26:43What would you say to any employers in the room? And then we'll open it up for questions, so if anybody has them, feel free to step up to the mic now. What would be your sort of parting words or call to action for any employers in the room thinking about, how do I get into a more data-driven, transparent health plan?
27:10Bryan Orr: I mean, you guys already said it. And by the way, amazing presentation before I came up. I hadn't seen it before, and it was really... I mean, I learned some great stuff from that. It's exactly what you already said. You don't really have the option to wait anymore, for a lot of different reasons. And I think a bigger one than the legal reasons behind fiduciary responsibility is that you feel that in your gut, right? I mean, you feel that responsibility without having lawyers and legislators telling you that you need to. That feeling of, I need to act in the best interest of the people who work with me and for me. And I think now is the time that it just has to happen. I mean, again, all day long we've been hearing about it. It's been amazing, all the different presentations. But that's the way I would summarize it, is you do need to take action, and you don't need to do it as extreme as I did, but you have to start walking down this path now. Because ultimately the employer is responsible for participating in this, and the decisions do end up being at your doorstep. So make them now. Start walking down that path.
28:06Now, what I find most intriguing about you, and then the group of employers that we have at those two tables: before fiduciary was even the cool thing, right, or the thing everybody was talking about, there was this moral and ethical ethos leading yours and all of your decision-making that's led to amazing financial outcomes. But I know what's most important to you is the health outcomes of your team. So I want to say thank you, and thank you to all of you back there, but thank you so much for trusting us on this journey and being an example to other employers. Bryan, where can the audience connect with you if they'd like to?
29:02Bryan Orr: Oh gosh, where can they connect with me? A lot of different places. Probably the easiest way, I have a personal website, bryanorr.com. So, yeah, you can connect with me there.
29:02Yep. Awesome.
29:02All right, guys. I hope you found that valuable. If you're curious about any of those resources, please reach out to me. I'm happy to share. Always am, always will be. Rising tide lifts all boats. So let me know if you need something. So share, like,
