Transcribed from the recording and lightly corrected. It may contain errors; the recording is the record.
00:00Patrick Williams: There's a lot, you know, there's a lot of people that are using the fiduciary word as a marketing term, but really has very little as far as backing it up.
00:10Chelsea Ryckis: Can't operate your business. You can't take commission. You can't take bonuses. I mean, you can and you can disclose it, but ultimately it's inherently a conflict of interest. Like it's prohibited transactions all over the place.
00:21Patrick Williams: If you're managing a retirement plan, if you're managing a health plan, there's certain responsibilities that come with that. And part of that is being able to document your process.
00:31Chelsea Ryckis: RFP processes have been designed to protect incumbents and to deliver the exact same BS essentially every single year. The system has been working the way it's been working for as long as it's been working because somebody is making a lot of money and it's generally not in the best interest of the plan sponsors.
00:50Donovan Ryckis: Welcome to The Business of Benefits.
00:52Chelsea Ryckis: The Business of Benefits is your no BS, no sales guide to real solutions.
00:57Donovan Ryckis: No gimmicks, just the truth about how to take control, transform your benefits, and care for your most valuable asset, your people.
01:05Chelsea Ryckis: 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?
01:14Austin Townend: Hello everyone. I am Austin Townend and welcome to this episode. This one is a little different than usual. So instead of one full conversation, we pulled together the most watched clips from the last year of the show. So that's moments that actually, you know, people really stopped and listened to and watched. And just based on the volume and the numbers, these are the things that our viewers really enjoyed. So we put this all together. You're going to hear bites about PBMs, about making the big, you know, self-funded leap. You're going to hear about reference-based pricing, about captives, and even from Mark Cuban where healthcare is headed and a lot more. So think of this as a highlight reel, short segments, lots of different guests, but same goal of making you smarter about your benefits plan in about the same amount of time that it would take to drink your coffee. So I hope you enjoy.
02:08Chelsea Ryckis: So let's set the stage then for our employers on the PBM space right now, because I feel like if somebody doesn't know at this point what a PBM is, they may have been under a rock the last couple of years. But nonetheless, let's back it up. Can you tell us exactly, like, what does PBM stand for and what was the original goal when PBMs were implemented and designed?
02:30Rachel Strauss: Sure. So PBM, and again, it's good that you take a step back here, because we do assume that everybody knows what a PBM is. And I do think employers and the audience of your show are probably getting more and more wise to what a PBM is. But for those that may not, a PBM stands for pharmacy benefit manager. PBMs really came to the scene close to 40 years ago, you know, in the early to mid-'80s was when you first saw this concept of a pharmacy benefit manager. And it was a way to connect the payer side of healthcare, right, with health insurance plans changing models. You know, pre the '80s, it looked a lot like our high deductible health plans do today. It used to be all these first dollars and catastrophic claims was where insurance came in and would back everything up. And, you know, when we saw this evolution in healthcare in the '80s, and I say we, this clearly, Chelsea, I will not age myself that much. This was before your and my time. But to see the cycles of where healthcare has gone in these last 40, 50 years, you know, once costs started going up and first dollar did not seem as manageable, we saw this invention of the PPO network. And networks began to really start, you know, tying controlled costs down for hospitals, leveraging patients that the carriers would sign up, and this was the era of Blue Cross, right? And all of the major carriers would later follow. And, you know, it was the concept of a network that began first with the medical side. Well, pharmacy, because it's a little bit different in how pharmacy is billed, pharmacy is a product, right? You walk in a store, there is a retail transaction that is occurring, and on the backside, a product is leaving the store that has inventory. And so the concept of a PBM was really similar to medical, create a network of pharmacies, right, that would accept payment. It's a little different than medical because it is done instant. So it has, you know, a way of— the easiest way I can explain it is like credit card purchasing, right? When you swipe a card, there's digital that talks to digital. That digital to digital is what the PBMs created. It was the network switch that enabled a pharmacy to process a prescription. Instantly verify eligibility. Yes, this is a patient. Yes, they're on this health plan. And where it's evolved to today is, you know, very complex because there are so many other factors in that, you know, 0.2-second transaction. What is the drug? What are the members supposed to pay? What is the plan going to pay? And all of that is going through in milliseconds of transactions. And that is, you know, was the purpose of PBMs, was to create this ease of payment to the pharmacies and a network approach.
05:20Chelsea Ryckis: Can you explain the vertical integration? Like, so I know who own— like, what carriers own which pharmacies, which own— like, but can you break that down? Like, the 3 or 4 PBMs that own 80% of the market, like, who owns each of them? Can you give us that rundown?
05:36Rachel Strauss: Yes, absolutely. So you've got [company removed], which is partnered with [company removed]. You've got [company removed], which is owned by [company removed], and you've got [company removed], which is owned by [company removed]. And so underneath all— and there are charts that are a million of them that actually go lower and lower. But, and by the way, the 3 largest GPOs that I mentioned all have a board of directors. But the 3 largest GPOs, the first one being [company removed], which I think is in Switzerland, [company removed]. I believe the chairman of the board of that is [company removed]. So not [company removed]. So which is what makes me laugh because they come out and say, we're gonna do pass-through pricing, pass-through rebates. Okay, well, they don't actually do the rebates. [company removed] does, an offshore holding company. That is then the chairman of the board of [company removed], which by the way is who like even some of the best pass-through PBMs are still going up channels to get through [company removed] rebates, right? And so the 3 ones— okay, so the next one is called [company removed], which [company removed] is the chairman of the board of that one. They all are chairmen of the boards of these major rebate GPOs and employers who are self-funded, please ask how your rebates are being aggregated, who is doing it, because that's how you're going to kind of find, like, and even in the most innocent of PBMs, they're not getting into this business, but they're contracting with somebody. And that's why I'm saying like, there's so many layers of the onion that even, and you know how one of the questions I've been asking PBMs lately is, do we have to use your aggregator? And if they say no, then I really know there's no skin in the game. Those are PBMs who have a more realistic admin fee in that $10 to $12 range.
07:33Chelsea Ryckis: Right. That is such good information. And I think really good for employers to understand, like, the web that's woven in healthcare is super complex. And the vertical integration, to me, when a company owns a company who owns a company and they can just shift dollars into different buckets, that is always a giant red flag because even if you have access to claims data, you can't possibly track all of it or where it's really coming from, where it's going, who's got your best interest in mind. Let's talk about— so something that we use a lot is international sourcing. And I know that that is incredibly controversial if you're in the industry. Some people are all about it. Some people say that it's a liability and that there's lawsuits coming around international sourcing. So, there's very— it's a hot topic. But I will tell you, just yesterday, spoke with a prospect, not very large, I think 250-ish insured. And it wasn't even one of the biggest impact stories, but nonetheless, 250 insured. And we've got just on international savings, $330,000 annually, which, you know, it's not gonna like make or break anything, but it's significant for that size of a company, right? We have another client right now with just from using the international sourcing, they've got about 500 insured. Their per member per month cost on prescriptions prior to having a fiduciary pass-through transparent PBM was about $256 per member per month. And now it's at $52 per member per month. We didn't ask them to do anything different, guys. We just used international and these other strategies we're talking about. So, how does international work and what's your opinion on it?
09:21Rachel Strauss: So, I'm from Detroit originally, which was 15 to 20 minutes from the Canadian border. So, we have— I've been promoting international importation for pretty much my entire career. I believe importation should always be an offer by every employer. I think the controversy is when it is done incorrectly, when it is not done thoughtfully and in partnership with the PBM, because that is where it can get dangerous and more expensive. And I'll explain why. But when you are importing from Tier 1 countries, and that is the first thing I need employers to hear, Tier 1, Canada, UK, New Zealand, and Israel are the tier 1s that I am actually going to Israel in 2 months to visit one of these pharmacies. So I'll make sure to get you a clip to share with your folks. But I'm going to show everybody that the box says Ozempic. It is from the manufacturer. Like, these are actual drugs. You know, where the controversy is coming from is because you've had some international providers, if you don't do your research, that are not sourcing from tier 1. They may be sourcing from other countries, which again is fine, but there can be a liability because they don't have the same checks and balances systems. And the lawsuit, you know, you're referring to is, I believe, is it [company removed]? One of them is [company removed], I think, is suing because some of the HIV medications that were imported were different dosages and different warning labels than what we have here in the US. And so there were some issues that, you know, were endorsed improperly. Now, employers, this liability is not on you because we at least recommend, and hopefully you would not— I'm sure Chelsea says this to all our clients— you can't mandate a member get their medication from another country.
11:15Chelsea Ryckis: Right.
11:15Rachel Strauss: So that is the first piece. And so I believe some of the liability is going to be if there was an enforcement that they had to get this drug internationally. The next piece is, you know, tariffs. I'm getting asked a lot, are tariffs going to impact this? Our belief right now is the answer is no, because again, it is personal importation. It is shipped to them as a recipient. I think if anything, the tariffs are going to affect our US importation prices because the US is essentially getting drugs from other countries. And that is where I think we're going to see the tariffs and cause from an AWP perspective, the overall pricing you, the employer, are paying unfortunately, like eggs, right? Everyone wants to talk about eggs. I think that's where we could potentially see some issues. But personal importation is an amazing strategy to put in place if 340 is not an option. Because again, at the very least, you should know and the employee should know what it costs.
12:15Chelsea Ryckis: 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?
12:22[name removed]: Well, I'm a 10-kids guy. So when you're a 10-kids guy, you make bold moves regularly, I guess. No, I think— so one of the really cool things that we've built in [client removed] is a lot of trust of leadership. We recently were awarded a top workplace [details removed]. 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. You know, it's that fiduciary thing again. And you know that trust has a time limit to it, you know, 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. You know, 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. You know, 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.
13:41Chelsea Ryckis: Can we go back to the skin graft? So, this is another example. The hospital, there was an employee at [client removed]. He was bit by a spider on his pinky. So smallest finger. The hospital pre-authorized 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% price differential.
14:11Donovan Ryckis: That's it, nothing else.
14:12Chelsea Ryckis: Yeah, simple.
14:13Donovan Ryckis: That was one of those things like our— 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. Like, 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 the most— one of the most absurd examples. No delay in care, same physician, same city, maybe a couple of miles down the road.
14:48[name removed]: 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, you guys are going— 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 buy— 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 and give me things. But yeah, there was just— there was 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 is a risk, right? Like, this is unknown territory for us. And I think anybody who's going to make— 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.
15:49Chelsea Ryckis: Spoiler alert, [client removed] has been very successful with reference-based pricing, especially under the leadership of [name removed]. So we know that the tide changed somewhere along the way, right? What was the moment?
16:00[name removed]: Well, this was again back at my last company, and that's what's so funny about this whole storyboard. So it was more of an awakening for me because I thought, okay, well, this is something that we as leaders have to agree upon. And I understand it's a financial issue. An 18% increase is a lot. Yeah, it's a lot. It's huge on a family-owned business. So it was that point I said, OK, well, I need to be open-minded, but I'm also a show-me person. So I understand what you're saying, but I need you to show me how this is going to work. So one of the ways they did that was one of my HR colleagues— and there were only 2 of us in the department. I want to say that too because that was the other fear was, do we have enough support? Can we handle this?
16:51Chelsea Ryckis: Right.
16:52[name removed]: So it was, OK, we have an EOB, an explanation of benefits. And it was run through our BUCA plan. And I can't remember exactly what the cost was. Just say $3,200. And then they ran it through the scenario of reference-based pricing. It was like $300.
17:14Chelsea Ryckis: Yeah.
17:14[name removed]: So it was that moment I started realizing that was the big lie. The light bulb goes on. And then I start understanding more of the mechanics of the plan and why the system is misaligned. And really, it's sick care. And that's problematic.
17:32Donovan Ryckis: Yeah.
17:33Chelsea Ryckis: How much do you think— maybe you know this number offhand, maybe you don't, but over the last few years, like the decisions that you've made leading this charge, do you know the financial impact?
17:41[name removed]: Well, I do know from a billed charge perspective, we've saved almost $24 million from 2019 to the present time.
17:50Chelsea Ryckis: Wow.
17:50[name removed]: So $24 million off of billed charges. We've, you know, in 2021 when we started making plan changes, when you go on to a plan like reference-based pricing or another, you know, type of self-funded plan, when you have savings, you have the ability to reinvest it.
18:09Chelsea Ryckis: Yes.
18:10[name removed]: Into the plan or whatever it is you want to do. But we had $1 million in surplus in 2021. That's never happened in my whole career. Like, oh, we have money left over.
18:21Chelsea Ryckis: Right. Like, what are we going to do with all this money?
18:23[name removed]: Yeah.
18:23Chelsea Ryckis: Like, that's an HR's dream.
18:25[name removed]: Well, and the other thing too is like, okay, I know as a matter of fact that we are contributing to the bottom line. We are no longer a cost center. We are helping to become a profit center for the company. And, you know, we're not costing the company money because we're adding value, right? Not only to the company, but the balance of the employees as well. Is it harder to go in front of your employees and say, I'm sorry, you have another increase and your plan is going to suck more next year?
18:55Chelsea Ryckis: Yeah.
18:56[name removed]: Or I have to learn as an HR professional, I have to learn something new so I can add more value to my company and my employees and think outside the box. But for me, having the ability to have such an impact is so rewarding, and I'm so grateful that I went through the difficult stuff to get to where I am today.
19:17Chelsea Ryckis: Yeah.
19:17[name removed]: But the other part of it is that when you're on these type of healthcare plans, number one, your employees, at least in my experience, they are getting more advocacy.
19:28Chelsea Ryckis: Oh, yeah.
19:29[name removed]: You know, they—
19:30Chelsea Ryckis: They're not calling like a 1-800 number.
19:33[name removed]: No.
19:33Chelsea Ryckis: Going through like a—
19:33[name removed]: A call queue, and then good luck. Talking to the same person.
19:37Chelsea Ryckis: We've all seen the denial rates at BUCA's for claims and getting through that process too.
19:40[name removed]: Exactly. I mean, listen, nothing is perfect, right? But it's also difficult going from United to Cigna or Cigna to Aetna. There's always a, quote unquote, disruption, right? So again, choose your hard. Choose what you think is right for the balance of the company, the employees. But, you know, I'm going to choose this all day long because it's better for my employees and the organization as a whole.
20:07Chelsea Ryckis: Something we talk about at Ethos Benefits is the problem-solution cycle, right? So it's like, imagine this picture, like a moving graphic, and it's like the problem, solution, problem, solution, and it goes in, it gets like a spiral and it's getting smaller in the middle. And, you know, to your point, nothing's perfect. Problems are going to happen. Problems are going to happen in fully insured plans, like 18% increases every year, and problems are going to happen in self-funded health plans. Like a provider doesn't accept reference-based pricing. Okay. A hospital doesn't want to negotiate with us.
20:41[name removed]: But you can problem solve in those situations.
20:43Chelsea Ryckis: And that the problem solution cycle, you figure out the solution, right? The problem isn't as big as a 20% increase. So—
20:51[name removed]: Again, choose your hard.
20:52Chelsea Ryckis: Choose your hard. Yes. I just, I love the choose your hard. I love the problem solution cycle because we can sit here all day long and I have conversations with a lot of HRs and I feel for them a lot of the times because sometimes their opinions aren't valued enough. The thing that I find really important when we're rolling this out is best practice is to roll out this program before open enrollment, before everybody's using the new plan.
21:25Danielle Young: Absolutely.
21:26Chelsea Ryckis: And then you have this influx of people who feel like, oh, well, you know, my doctors aren't in network, blah, blah, blah. Do this way ahead. It gives you an opportunity to educate employees about what you're doing and why you're doing it. And hey, help us build out our new network, or however you want to phrase it to them. I know—
21:43Danielle Young: Frame it, yeah.
21:43Chelsea Ryckis: Network's a not friendly word necessarily to use with this, but—
21:47Danielle Young: It's fine.
21:47Chelsea Ryckis: It helps in understanding in those first couple meetings with employees if you say like, you don't have a network, but we, if you would want us to make sure that your provider will be accepted, like we can build that out for you. And yeah, I think preemptively doing that is such a game changer for the noise component.
22:04Danielle Young: Dude, I'll tell you. So like we at ClaimDoc right now, we make 10 outbound phone calls for every one that we get inbound from a provider. So we spend a ton of time and energy meeting the provider community where they are. And that typically, to your point, we start 60 days prior to the open enrollment effective date is when we start that pave the way process. We always prioritize people with actual appointment dates. So for example, like if someone's going to give birth a month after the plan goes live, then we're going to start there. And then we kind of funnel down into, this is my kid's pediatrician, this is my allergist. We get to that soon before the effective date, but those we prioritize based on timing.
22:51Chelsea Ryckis: Let's talk balance bills. What is it?
22:54Danielle Young: Okay.
22:55Chelsea Ryckis: And how does it work?
22:57Danielle Young: Yeah, so a balance bill, we're all pretty familiar with it if you are a consumer of things even as innocuous as dental insurance. If you pay car insurance, you probably have some idea of this. So a balance bill is essentially when a provider gets a reimbursement from insurance or from the employer plan and they think it's inadequate. Let's go back to the knee surgery, for example. The employer sends their $40,000 reimbursement, $20,000, whatever it is, and for some reason or another, the hospital says, nope, that's inadequate. What they often do is they'll go around the employer insurance plan and go straight to the member and say, hey, you owe me X number of dollars because your benefit plan, your insurance plan didn't pay me really. Didn't cover it. Didn't cover it. Yeah. And so, and that situation happens on network plans too.
24:01Chelsea Ryckis: Oh, yeah.
24:01Danielle Young: I always like to clarify that, that UnitedHealthcare, Anthem, Cigna, Aetna, doesn't matter who you have. That already happens about 8% of the time, 8% of claims on major BUCA carriers. When I say BUCA, I'm referring to Blue Cross United, Humana, and Aetna specifically. That's an industry term. I just wanted to make sure I defined. On a BUCA plan, there are still balance bills that happen about 8% of the time on claims. And employees often don't really know better, so they tend to pay them or they ignore them and they end up in—
24:28Chelsea Ryckis: Collections.
24:28Danielle Young: Credit impairments or what have you. Reference-based pricing has been historically pretty notorious for creating more balance bills on healthcare plans because of the repayment and the reimbursement structure, which is less than what hospitals would like to see. Historically, I will say in the more modern RBP times, there are many ways that we work around this. At ClaimDoc, the way we do it is that we work around it because we have a provider relations team. Nationally, our balance bill rate right now is less than 1%. So we do better because of our outreach to providers, because of our consistent commitment to partnerships with healthcare providers all over the country. We— that's why we see that. But historically, you know, if somebody comes and says, oh, you don't want to do reference-based pricing because of balance bills, that's a scare tactic is what I call it. Because if you're using a good partner who's being judicious about that, that's not really actually a thing. It's sort of a— it's the boogeyman in the closet of how reference-based pricing works.
25:42Patrick Williams: Hi, I'm Patrick Williams, co-founder of Fiduciary in a Box. Employers today need more than just renewal strategies. They need a smarter approach to benefits. And that's why I recommend the Business of Benefits podcast. It's packed with actionable ideas, thoughtful discussions, and insights from some of the top experts in the industry. For the past 3 years, Fiduciary in a Box has supported Ethos Benefits by delivering the fiduciary operating system that empowers employers to organize, document and manage their fiduciary responsibilities with clarity and confidence. If you're looking to build a better health plan, not just maintain one, start tuning in to the Business of Benefits podcast.
26:30Donovan Ryckis: So, as a good conversation or knowledge base, like I always find different consultants, different people in the industry kind of explain this differently. And I always say like the term self-funded is created by the insurance companies to scare the crap out of you and just sound terrible. Fully insured seems like a warm blanket, self-funded, you're out on the streets. And I know, you know, we know through experience it couldn't be more different. You always have insurance. You're choosing that level of insurance. Usually if it's your first year, you're choosing more insurance than you had prior fully funded. But how do you explain that when you're starting a conversation with an employer, the difference between fully funded, self-funded, and kind of mitigating those concerns and realizing, you know, getting them to understand you can design around them.
27:16Spencer Smith: Yeah, I think, I mean, there's a couple ways you can explain it. I think the best way is an analogy, Donovan, and you probably use this analogy sometimes, but we'll ask employers who are fully insured today, would you ever use your car insurance to pay for gas or to pay for tire rotations? And they laugh, you know, and go, that's kind of a dumb question. Of course, the answer is no. But I think the same idea holds true in health insurance. You would not— it doesn't seem most efficient, right, to use your health insurance to pay for labs or X-rays or things that you can pay for in cash very easily. And if your plan covers all these little small things and ensures them, what do you think is going to happen to the premium as a result? What would happen to your car insurance premium if it covered tire rotations and gas and oil changes, it would probably triple or quadruple. And so when you get that basic understanding of, I'm kind of over-insuring my plan as an employer, maybe there's another way to do that. And the other way to do it is this thing we called self-insurance, which now lets them pick the level of insurance they want to purchase. And then they use their own P&L, their own cash to pay for the things that they can afford to pay for. It just becomes much more efficient. And I like to think of it, and do you ever explain it, Donovan, as guaranteed cost versus variable cost, right? So if I am fully insured as an employer, it's all premium, no matter what the outcomes are, good or bad in terms of consumption, I'm going to pay that premium no matter what. When I self-insure, now the majority of my plan is things that I can control and I can see, and I'm using cash to pay for most of those things as well. So it just becomes infinitely more efficient if done correctly, which I think is the important caveat there. But I think there's also a misconception, Donovan, that to lower costs, you have to make the plan worse or you have to impede care or disrupt access. And that's absolutely the opposite of the truth.
29:09Donovan Ryckis: Yeah, that's a really great point. And I find that's something that we have to like actually state because they're coming off at least like a 20-year history of any time they get a high renewal and they need to make the plan cheaper for the company, they have to take something away from the employees. They have to add more deductible. They have to put them in a tighter network. They have to increase their premiums. And that is a starting point that always, like, we have to stop and explain it. Like, fundamentally, if this is going to work for the plan at the end of the year, it's because it worked for the employees first. Like, it was a good result for them. And they wanted it and they did it that way. And they got, you know, cheaper drugs, no-cost drugs from international sourcing. Maybe we did green imaging and they got free advanced imaging, right? Like all these solutions, they work for them. And then at the end of the year, they work for the plan.
30:01Spencer Smith: Well, yeah, I mean, we're in a state where the average, I think, family premium somewhere in the neighborhood of $25,000 to $26,000 annually. And we've gotten to that point because I think we've made it difficult for employees to actually access care when they need it because of the financial constraints. And so therefore what happens? They delay care, they don't get care at all, and then something terrible actually materializes. Then they're forced to go get care. Then it's really expensive for the employer and the employee too, because now they're forced to pay maximum out-of-pockets and all those things. If they had just made it easier to go get the routine care or the early onset care they needed, because they're removing financial constraints, removing deductibles and copays and coinsurance. It's actually better for the plan. And obviously it's better for the member as well. So we have to retrain employers to stop thinking consumerism is cost shifting to the employees and giving them more skin in the game. The more skin in the game is actually much more expensive for everyone.
31:00Spencer Smith: Closing thought on captives exploration, understanding, or— well, I want to close on something you've probably heard before, but I don't know the audience has heard before. I remember we talked about the acronym. We're trying to avoid acronyms, but POSIWID is one of my favorite acronyms. And what it stands for is the purpose of the system is what it does. And what that means is whatever outcomes you're getting, that's why the system exists. And so if you're in this world of fully unfunded, what are the outcomes you're getting? Rising costs and often worsening plan designs year after year after year. So you have to accept as an employer, that's what that system does. And if you don't like those outcomes, then you have to decide, am I ready for a different system or a different model that will deliver the outcomes I'm looking for? And I think most employers are at that fork in the road right now, and they've just got to be willing to lean into something new.
31:53Donovan Ryckis: No, you told me that. I've used it so many times since.
31:54Spencer Smith: Good. Good.
32:00Donovan Ryckis: I recorded 2 podcasts this week on other people's shows, and I've used it. I used it both times. So, it's part of my conversation flow with this now because when you're going through it and they're starting to have questions, like the rebuttal thought or whatever is like, well, doesn't my insurance carrier want to keep the premium low to keep me as a client? Right? Like, well, doesn't my commission broker want to keep it low? Well, has it been working?
32:21Spencer Smith: Yeah. Is it working? That's a simple question. If it's not working, then you're in the wrong system.
32:28Donovan Ryckis: Either it's been failing for 10, 20 years and they're really bad at doing that, or it's just not the purpose of it at all.
32:37Spencer Smith: That's not the purpose of it.
32:38Chelsea Ryckis: Curious to know. So we come up a lot with RFPs and when we're working with mid and large market employers nationwide, the question always is, well, how many years of experience, like, or how long has your firm been around? Right. And we're 10 to 15 years.
32:51Mark Cuban: That's the consultant's way of saying, fuck you.
32:54Chelsea Ryckis: Exactly.
32:55Donovan Ryckis: Exactly.
32:56Mark Cuban: You're not going to win the business.
33:04Mark Cuban: That has nothing to do with the customer at all, right? It's just their way of excluding companies. You have to deal with at least one company that has 50,000 members, have been in business for at least 5 years, and have a 10-year background with whatever, right? That's just their way of saying to the big 3 insurance or PBMs, look, give me more money, and when you take me on that trip to Aruba, I want more. That's it.
33:27Chelsea Ryckis: Yeah, so I'm glad you said that because it feels to me like a lot of plan sponsors, they're recycling RFP questions that are designed to protect incumbents, right? And largely these large publicly traded— and the business model of the large publicly traded brokerages literally do not allow for aligned incentives. It just doesn't.
33:47Mark Cuban: No, you got to hit your numbers, right? It's not the same thing. Nobody in this industry ever brags that, you know what, we're making less money because we found a better way to save money for patients. Nobody.
33:59Chelsea Ryckis: Right. My last question is just, I know, so you've done the pharmacy, now you're working on wellness. What is the next space in the healthcare monolith that you want to get rid of?
34:04Mark Cuban: To get rid of insurance completely. Because insurance, when you really think about it, is just banking.
34:14Donovan Ryckis: Yeah.
34:14Mark Cuban: They don't really take risk. They take, you know, they get capitated money from the government for Medicare Advantage. It's more expensive than standard Medicare or traditional Medicare, right? They act as ASOs for most of their big companies. They typically don't do smaller to medium size or fully insured, right? And so, they're just bankers. And so, from that position, I'm like, okay, the one debt that everybody has that they never pay off. You can pay off your school debt and your car, your house. You're always going to be paying your healthcare premiums no matter what.
34:48Chelsea Ryckis: Yeah.
34:48Mark Cuban: Always till the day you die. Even the Medicare, right? Till the day you die, they're taking it from your Social Security. And so, what we're looking at doing is saying rather than depositing your premiums to the insurance company, and this isn't an HSA because you have to have an insurance program to do HSA, right? You have to have a high deductible plan. So, we're saying we're going to work with a bank or start a bank where you deposit on a monthly basis the amount you would be paying as a premium under an ACA plan. So, let's just say you're a family of 4 and it's $1,200. You put that money in this bank account and you pay this in there monthly, monthly, monthly, monthly. It's your money. It's your money. But there's restrictions in order to get that money spent. Any healthcare costs you pay out of that money, right? We're going to verify the cost so there's nothing, you know, that you're not trying to take advantage of it. And in the event something messed up happens and you don't have enough money there, we'll loan it to you. Now, we're going to charge you for stopgap insurance, right? Because, you know, if above $30,000 or $50,000, whatever that number is, and we're going to make you go to direct primary care, and we're going to take the $150 a month out of the $1,200 that you pay. But you're going to be able to accumulate. If you never get sick, when you get to Medicare, that money's just yours. If you only get sick a little bit and there's some left over, you're earning some interest— not a lot, like a checking account— that money's yours. But the promise is, for however much you don't have under the stopgap amount, we will loan you that money. And you pay it back to us by continuing to pay your quote unquote premiums that are your deposit. So if your deposit was $1,200, it's yours until you borrow money. And when you borrow money for what you can't afford, that money goes to pay back what you owe us. That's it.
36:39Chelsea Ryckis: That's brilliant. That is so cool. I'm excited for that to happen. She's like, sign me up.
36:46Donovan Ryckis: Yeah.
36:46Chelsea Ryckis: Why? I've got so many years left in paying this debt of my insurance, so I might as well find a better way to do it.
36:52Unidentified Speaker: Right.
36:53Mark Cuban: Yeah. And if you can save it, if you can stay healthy, then you have every incentive to stay healthy because you get to keep the money as opposed to it goes to the insurance company. And the minute you close out your deductible, you want to spend wherever you can, even if you don't need the surgery. It's like, I got a stubbed toe, let's go get surgery.
37:13Chelsea Ryckis: Can you tell me kind of the typical, especially for the men listening that maybe don't have spouses that have gone through this or family members that have gone through this, like what's a typical childcare delivery look like for a woman in the US?
37:27Brittany George: Yeah, so when you're the typical, most women, what people don't realize is that most women will be induced, you know, 60% of women will get an epidural. And one of the things which I don't, I don't know about you, I was— [details removed].
37:44Chelsea Ryckis: Really?
37:44Brittany George: [details removed] Because you think about it, from the day you were first hearing about birth, it's the thing by which all pain is measured, childbirth. So we're conditioned from the very beginning to fear the pain of birth. And so [details removed], but I didn't realize what the cascade of intervention what happens with the epidural, that it slows down labor. For one, I didn't know what was in the epidural. Did anybody ever share with you what's in the epidural?
38:16Chelsea Ryckis: No, I don't know if I've shared with you. [details removed] But no, I just know that it's a bunch of toxins. I've heard horror stories, but I respect— I will caveat that with, as I'm sure you do, I respect every single woman's decision to give birth however the fuck she wants to. Like, that is not my place to intervene.
38:46Brittany George: Yeah, no, and I completely agree because obviously I have no right leg to stand on to tell women, you know, how they should do it, [details removed]. I was terrified, but I had no idea. I think that I went into it just at that point, I just assumed that no one would do anything to harm a pregnant woman, and anything that should be disclosed would be. And I think that's how a lot of us enter. We choose our doctor and we trust the doctor, and we think more information is better. And I learned quickly that more information just means more intervention. So that's one of the things. So 70% of women get an epidural. An epidural has fentanyl in it. You know, that to me, realizing that later was mind-blowing. You know, you see images of people on the side, on the streets in California taking fentanyl, and here we are giving it to every 70% of laboring women. And not to say that if even if you choose it today knowing that it has fentanyl, it's not here to judge that decision. But I think that women, we want to know that given that we've been— we're not eating sushi, we're not eating deli meat, we're doing all these crazy things. You know, we're told not to drink wine, but then we're given fentanyl, and it does show up in the umbilical cords of 80% of children. So these are things to think about and make your decisions accordingly. And if you choose the decision, if you choose to still have an epidural, that's— no one's here to judge.
40:06Chelsea Ryckis: Data-driven decision that sits well with you, right? And that we talked about that a lot on this podcast about like, not only asking better questions, but when you go to act, doing it with integrity with real data. And I mean, interpret that as you will. Like, fentanyl to me is a hard fucking no. But like, maybe other people are like, you know what, that is better than something else, the pain or whatever they perceive to be worse. And that's an individual decision.
40:38Brittany George: I think it's a strategic decision by hospitals to not inform women that it's fentanyl, because I think a majority of women would pause.
40:47Chelsea Ryckis: Speaking of cost, like if an employer is listening to this and they're like, oh, that's really interesting, a self-funded employer that could add something like this to their health plan, what do you foresee as the maybe price range for a doula services?
41:01Brittany George: So doulas range between $2,000 to $10,000 of where they were, but it's just cutting the cost of health of your labor in half, I mean, or your delivery in half, I mean, that's a savings at the end of the day. I mean, you talk about NICU babies as one of the most expensive things a plan can have happen. You know, it's in the top 10 most expensive costs. So if you're avoiding these things, you're more likely, obviously, with a C-section to have a NICU stay. So you're avoiding so many downstream costs if you're not— if you're only segmenting and looking at different financial aspects of having the actual labor. It's just so much more.
41:42Chelsea Ryckis: I would compare it to how we teach about direct primary care. So when you have direct primary care embedded in a self-funded health plan, you have that guide, that concierge essentially, where the patient can get same-day appointments, but they also understand the playbook of the health plan. So if there's an MSK issue, they can guide you to that point solution. If there's a cancer diagnosis, and they can guide you to the direct contracts with the cancer centers. And it's, in terms of experiencing healthcare, it's incredible because you're being told what to do that's going to be not only the best for you, but the best price as well, right? Right care at the right time at the right price. And I always think about doulas as sort of like the direct primary care for birth. And a lot of the times employers will say, oh, direct primary care, like that's sounds really cool, but I mean, $100, somewhere around there a month per employee, that's expensive. And it is, but immediately within 6 months, you see 30% reduction in ER visits.
42:43Brittany George: But the rush of hormones and all the things that happen as your body opens up, you know, I'm a very spiritual person and I will say it's the closest I've ever felt to God in my entire life. And it was the most magical experience of my life. And I realized so quickly, wow, we are robbing women. We're robbing women of this experience. The moment that will make you forever feel like the badass bitch that you are. For sure. You were born to do this. Nobody in a white coat gets to take this from you. You get to have this experience if you want to. It's just that the system's just not aligned. Women, a lot of women will not even have the opportunity to give birth the way that I did, and that just makes me really sad.
