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This is Laura Dedo with the Becker's Healthcare Podcast.
I'm thrilled today to be joined by Nick Ste,
who's the Chief Executive Officer of Northwell Direct. Nick,
it's a pleasure to have you on the podcast today.
Thank you so much for having me. I really appreciate the opportunity.
Now, I know we have a lot to talk about. There's so much happening,
healthcare and things are moving very quickly, evolving rapidly, um,
which is great to see. But before we dive into my questions,
can you tell us a little bit more about yourself, your background,
as well as Northwell Direct?
Sure thing. Um, so I have spent my entire career, uh,
working in the healthcare industry, uh, both on the,
uh, not-for-profit and for-profit sides of the industry. Uh,
I've spent the last 14 years, uh, with Northwell Health,
the first half of which was spent within the not-for-profit delivery system
in roles across technology operations,
and human resources leadership.
And then over the second phase of my time with Northwell,
I've transitioned into more of their, uh, commercial ventures.
And I've had the privilege over the last three years of serving as the CEO of
Northwell Direct.
And Northwell Direct is Northwell Health's wholly owned subsidiary that is
focused on partnering with employers to help them find access to high quality
healthcare for their team members at a lower price point.
And we do that through a variety of ways. On the one hand,
we have a high performing narrow network alternative to the traditional
insurance carriers that can be leveraged for an organization's team member
Benefits that we see on average can save an employer about
20% on their employee benefit costs. And then on the other hand,
we have a range of clinical solutions that we can deploy in the office or
virtually, uh,
to support all of the healthcare needs of an organization's team members.
And so, uh,
we've been really lucky over the last three years since we launched to work with
over 140 employers, uh, that are, uh,
local, regional, and national, uh, in their scale and scope,
depending on which organization we're talking about.
It includes the likes of Bank of America, the United States State Department,
uh, the New York Police Department, as well as a variety of other, uh, local,
regional, and national employers. And so, uh, we're really excited,
really encouraged about the work we've been doing, uh, with employers.
And I think there's a real opportunity for us here to have an impact on not only
the health and wellbeing of their team members, but also on the way we organize,
deliver, and pay for healthcare in this country by working with employers.
I love that. I think that's so important and such an innovative way to develop,
um, that relationship between the health system and employers and working with
insurance companies and, and members and patients. It just,
it seems like to make so much sense, but I, I know, um, you know,
something that Northwell is very much on the forefront of this trend.
So from your perspective, what are some of the big issues that you're, um,
really focusing on today in healthcare?
I think the one that comes to mind most clearly, uh,
and it it really has to do with why we're seeing so much interest from
employers, uh, in the work that we're doing,
is just a level of frustration that exists, uh,
among the employer community around the continued
rising costs to provide, uh,
health and wellness benefits to their team members. You know,
that that annual dilemma that the head of HR and the CFO
face when, uh, they receive an increase, uh,
in their benefit costs from the traditional insurance carriers and their forced
to go through the exercise of figuring out how much of that increase is gonna be
absorbed to the business and how much of that increase is gonna have to be
passed on to their team members. And certainly over the last year, two years,
that conversation's become even more difficult, uh,
in the context of inflationary pressures,
recessionary pressures, um, and,
and the recruitment and retention challenges that many organizations have faced.
So, you know, we see employers at a point of frustration. You know,
if you think about, uh, the costs for employee benefits, uh,
over the last decade, uh, they've increased over 20%. In 2023,
we saw an increase on average of 10%.
So the trend lines have been moving in the wrong direction for a long time.
And I think employers are finally starting to say,
we need to think about our team member healthcare benefits as
a business and a strategic issue,
and we need to start to look at alternative solutions and strategies.
And, uh, to me,
that's created a great opportunity for provider organizations like Northwell,
like Northwell Direct, uh, to step in and say there is a different way.
And we can do something that will not only, uh,
help you to control the rate of increase, save money, but will also,
in our view, provide a better experience and likely better outcomes,
um, has become something that employers are finding, uh, incredibly attractive.
So, um, you know, that's one of the big trends, uh, that we're,
we've been keeping an eye on, and frankly, why I think, uh,
we've had the opportunity that we've had to work with as many employers over the
last three years.
That, that's fascinating to hear and definitely interesting, um,
from the employer side, them being so willing and eager, uh,
to try something different and try something new and, and work with you on that.
Um, as you're connecting with, and especially thinking through, you know,
those who were, um, early to work with you on these types of models and then,
you know, now, um, additional organizations that you're working with,
um, where do you see as being, like,
what lessons have you learned over the past few years to really make that
relationship effective? Um, and, uh, you know,
being able to work closely with employers and understand their needs and then
apply that to your overall strategy?
I think the most important thing that we try to keep in mind in any interaction
we have with an employer is that each employer,
each organization and their team members are different.
And cookie cutter solutions are not the answer.
Uh, the approach that we take is we really try to understand an organization,
what their priorities and focus areas are,
what their culture is and what their people need.
And rather than delivering, you know, a cookie cutter solution, uh,
and trying to put a square peg in a round hole,
we work with those employers to customize the approach so that we can
ensure our solutions will actually have the intended results,
will actually meet the needs of their individual, uh, employees.
And so, what do I mean by that? How does it come to life? I'll,
I'll just give you a couple of examples. You know, number one, as I mentioned,
we have a high performing narrow network that we offer as an alternative to the
traditional insurance carriers. Um, we work with employers,
some of whom are comfortable and willing to say, yes,
we are going to make a wholesale full replacement of our,
uh, existing insurance plan, uh,
and bring in Northwell Direct as an option for our employees. Uh,
that's great. We love when they do,
but we also have some employers who are a little bit
more cautious when it comes to, uh,
making a change like that and like to take more of an incremental
approach and perhaps introduce Northwell Direct as an additional
alternative, as a choice offering versus a full replacement,
what we call a sliced offering. We're totally comfortable with that.
Our view is let's meet the employer where they are, where their culture is,
and where their people are to make sure that it'll be effective.
So it's just one example there of,
of how we work to make sure we're tailoring our approach
to the specific needs of an employer because we believe, uh,
you've gotta be respectful and,
and considerate of the unique characteristics of each organization and their
people. I.
Love that. I think that's so important in just, you know, what great, uh,
insight into building a program like this Now.
What are you most excited about today? What makes you nervous?
You know, one of the things I'm, I'm, you know,
frankly excited about is, um,
we're also seeing that there seems to be a level of,
uh, fatigue that is setting in around
what I,
I sometimes refer as point solution palooza point solution
mania, right? If you think about, uh, the,
the individual that's leading HR in, uh,
organizations around the country,
they are faced day in and day out with all kinds of different vendors
that are, um, you know, offering solutions around x, y,
or Z clinical issue, right? You can have, uh,
one vendor in today that's gonna talk to you about, uh, their digital,
uh, orthopedic and PT product.
You can have somebody in tomorrow, uh,
that's gonna talk to you about a point solution around fertility.
You can keep going down the list of all of these clinical point
solution organizations that have been deployed into the market, uh,
in many instances with funding from private equity that have created just this
deluge, uh,
that has become next to impossible for the leaders of HR
to manage through and to create a cohesive,
integrated experience for their team members. And I think there's a,
a level of fatigue setting in with that.
And I think there's a realization that it also
further fragments care,
and we're seeing employers express a desire for
solutions that are more integrated, uh,
so that we can look at their team members holistically as people
and put solutions in place to provide whole person care.
And that's where I think we really differentiate and why
we're really optimistic about the opportunity for provider organizations like
Northwell to provide employers with a breadth of
solutions that can be integrated and made really easy to navigate
for their team members as a way to move away from what has been
an influx of point solution.
So really encouraged to see that sort of sea change taking
place. You asked me what I'm nervous about. Um,
you know, if you look at, uh, the continued, uh,
acquisition of physician practices and
employment of providers, uh,
by large insurance companies who are pushing into the care delivery space,
uh, I get concerned, uh, about that trend line.
We're keeping a careful eye on it. We're also looking at, uh,
some of the new entrants, uh, into the provider space and what that will mean,
uh, to the overall care delivery ecosystem. But I would su suggest to you that,
uh, despite having, uh, particularly on the, on the insurer side, some level of,
of weariness about that activity, uh,
we feel pretty bullish about our ability to differentiate
the values and the philosophy and the approach that we bring, uh,
not only to care delivery,
but also to delivering innovative solutions to populations like
employers and their team members. So, I don't know if nervous is the right word,
or it's more a trend to keep an eye on, uh,
but we're very confident and we're very bullish about our ability to
differentiate, uh, in the face of that trend.
Absolutely. That makes sense. And definitely, you know, it is, uh,
great to hear from you in terms of how you're responding to some of the
different, um, trends and, and factors driving healthcare forward and,
uh, you know, what that could look like over the next few years. And,
and speaking,
what do you think most healthcare leaders will need in order to be effective and
successful in the next two to three years? As we've talked about,
the healthcare landscape is changing quite rapidly and preferences are changing,
there's new opportunities available and, and partnerships happening. So,
you know, in your view, where do you think that, um,
healthcare leaders will need to grow and develop, um,
as time goes on to be effective in the future?
You know, I think it's, it's clear that, you know,
our industry is experiencing,
uh, and undergoing, uh, a period of, uh,
challenging economic conditions of transformation,
uh, and on increased competition,
including competition with non-traditional stakeholders.
And, uh,
and I think that's been exacerbated as we think about kind of coming
out of the peak of the Covid pandemic and trying to reestablish
whatever our go forward new normal looks like. Um,
but, and so given that, I think more than anything,
what healthcare organizations will need to do, uh,
is number one, foster a culture of innovation, uh,
that unlocks the potential of your people, uh,
to surface new ideas, to surface new solutions,
to surface creative ways to thinking about how to
navigate this new normal and how to carry your organization forward.
And I think the organizations that lean into innovation
will, uh, really be positioned well. I think secondary to that,
um,
thinking about opportunities to create alternative revenue streams,
uh,
thinking about the diversification of revenue and
positioning our, our healthcare organization differently as we go forward, uh,
will be advantageous. And then lastly,
I would just say a sense of optimism,
because it could be very easy to look at all of the challenging
circumstances that we deal with on a daily basis to look at
all of that competition, uh, for, uh,
success as we go forward and think, my gosh,
it's easy to be pessimistic. I think we've gotta remember particularly,
uh,
for those of us that have the privilege of working for provider organizations,
I think we have to remember, um, that, um,
we can solve this, uh,
that we can be the ones to drive change, to drive transformation,
and to look at the road ahead as an opportunity to chart the course
forward, uh, for our industry.
And so I think a sense of optimism and a sense of hope about the
opportunity that we have is really, really important.
And I think if you can do that, uh, at the same time,
if you can create that at the same time as you think about
diversification of your, uh, revenue sources,
positioning your organizations differently and unlocking a culture of
innovation,
I think the organizations that get that combination right will be positioned
incredibly well for success.
Absolutely. Such a great point. Thank you so much for joining us.
This has fun discussion and look forward to connect you again soon.
I really appreciate the time and opportunity. Thank you so much.
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